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Insider Trading At The Fed

Well, all over the papers yesterday and today, you can find the news that Stephen Friedman, chairman of the New York Federal Reserve (from which he has just resigned under a cloud of controversy), bought in December another 37,300 shares of Goldman Sachs, of which he was a director. Now Fed officials are not supposed to be shareholders, directors or officeholders of banks. Goldman became a bank before Friedman bought these shares. No matter, said Friedman to himself. I'll just ask for a waiver.

And he got it. Why did the Securities and Exchange Commission issue this waiver? You ask me. I ask you. In any case, it did. Another triumph of rectitude by the S.E.C.

He's made $3 million in paper profits off these shares. He had about 40,000 shares before he bought what was still an illegal acquisition of holdings. By now Friedman has 111,000 shares.