It has taken nearly half a decade, but now Segarra, the whistleblower who first told her story to journalists at ProPublica, has turned that story into a book. She is an attorney who worked in regulatory compliance positions in banks such as MBNA, Citigroup, and Société Générale before taking a job at the New York Fed.

Her work as a regulator was not that of a typical bank examiner who visits the banks to review loan files for asset quality and crunch numbers on the bank’s capital, liquidity, and earnings. Rather, she specialized in areas on the “compliance” side of regulation to check matters such as how banks monitor their conflicts of interest. This position was a good match for her legal background and is why Noncompliant makes for a logical title for the book.

Segarra does a good job of summarizing the book in one of her final chapters:

A lawyer goes to work for the New York Fed. She is assigned to supervise a bank, verifying whether said bank is complying with the law. In the process the lawyer discovers that numerous laws, rules and regulations are being violated and disregarded. And not just by the bank the lawyer supervises—but also by some of her fellow New York Fed regulators.

The reorganization / Segarra’s first few weeks on the job at the New York Fed just happened to be at the same time that a bizarre reorganization of the bank’s compliance function was in motion. Her new boss explained that the group in which Segarra would work was staffed by “relationship managers” who in the past were responsible for scrutinizing compliance at the megabanks. But, as part of the reorganization, the relationship managers would be replaced by “risk specialists,” the role that she would play. These specialists were assigned to monitor market, credit, audit, operational, legal, and compliance risk. Most of these positions would be filled by experts who, like her, were new to the New York Fed.

The idea was to replace the “relationship managers,” who were former long‐​time bank examiners, in order to “upgrade the New York Fed’s personnel.” As Segarra summarizes it, “This convoluted and confusing structure had more to do with giving the old bank examiners the appearance of a job so as to improve their prospects of getting hired out of the New York Fed and less to do with how supervision would work moving forward under the new structure.” Additionally, the manager she was replacing, Jonathan Kim, was supposed to transition out of the job within a month, but he ultimately remained in his position the whole time Segarra was at the New York Fed (about seven months). She states the obvious: this structure “made my job very difficult.” Other relationship managers also remained or received promotions: “So much for getting rid of the old guard…. So much for changing a culture that was rotten to its core.”

To add to the confusion, Segarra was not scheduled to receive vital systems training for her job until many months after her arrival. When she raised this concern with a colleague, the response was troubling: “Don’t worry about that. I didn’t do anything the first year I was here.” During the transition before her training, she could do nothing more than listen closely and take meticulous notes. “Dysfunctional” seems like a kind assessment of the work environment.

Supervising Goldman / As luck would have it, Segarra was assigned to work on compliance matters for Goldman Sachs:

Long before I arrived at the New York Fed, Goldman’s reputation in legal and compliance circles was not good…. If the word on the street was right, my job would be incredibly easy. Finding issues with their legal and compliance programs would be like shooting fish in a barrel.

The oversight of Goldman was shared with the New York State Department of Financial Services and the Federal Deposit Insurance Corporation, with all the supervisors from the three working on the “Goldman regulator floor.”

The regulator floor and the Goldman offices are the primary settings for the book. The writing style of Noncompliant is not breezy by any means, but becomes predictable. Most of the storyline involves Segarra describing the meeting (or meetings) of the day, either with Goldman, her colleagues at the New York Fed, or the other agencies that oversee Goldman. She characterizes the sequence as “another mind‐​numbingly repetitive meeting.” One of her major findings was that “Goldman did not have a firm‐​wide conflicts‐​of‐​interest policy.” After she discovered this, countless meetings ensued and a Goldman legal counsel admitted, “There is no one policy per se.”

As the story unfolds, the reader gets bombarded with acronyms from the financial industry: CFPB, MRIA, RCSA, MOU, BSC, SR, IO, BSA, AML, CCAR. Reading the book is analogous to watching a very long episode of The Office, but without the bursts of humor.

Segarra reveals some really egregious practices: “Many New York Fed employees had side jobs…. We were free to set up our own legal practice on the side and make money practicing law while working full‐​time at the New York Fed.” As for sharing information with colleagues at the Board of Governors in Washington to facilitate oversight of Goldman, a New York Fed colleague claimed, “We don’t share information with the Board.” Segarra claims that she was blocked from taking a tough enforcement stance against Goldman. “We made a deal with Goldman last year that we would raise their rating,” explained a veteran Fed colleague.

Insider trading apparently is a “side‐​gig” for some New York Fed employees. “Have you gotten any good trading tips yet?” one former employee asked Segarra. Regulatory capture was pervasive: “A number of the [New York Fed Goldman] team members often leapt to the bank’s defense and worried how Goldman would react to negative criticism from the risk specialists.”

The hammer falls / As Segarra pushed back against this culture, one of the managers she worked under made clear that her moves were not appreciated and that “he had received some troubling feedback about [her] from a few people on his team.” Her notes of official conversations that were to allow her to both learn her job and create the official record for meetings were brought under scrutiny. One colleague interrogated her: “Isn’t it interesting how different people hear different things in meetings…. I don’t recall hearing a lot of these things noted in your meeting notes.” Segarra implies that the true meaning of the comments was clear: destroy her minutes of the meeting. That colleague would depart a few years later to work at Goldman.

With the evidence building that she was becoming persona non grata, Segarra began to realize that “I need to talk to a lawyer.” Her lawyer advised her to purchase a USB recording device.

With the end of her six‐​month probationary period looming, she had concerns. But she took hope when Kim entered her in the performance appraisal system, believing “he would not have been bothering to [set me up in the system] if the New York Fed was planning to fire me.” But she would soon learn that, as with everything else at the New York Fed, the performance appraisal process was a “shit‐​show.”

The end came seven months into her tenure, when she was ushered into a conference room by Kim, where one of the managers and someone from human resources awaited her. “Carmen, I am here to tell you you’ve been released from the bank,” she was told. “We’ve lost confidence in your ability to allow your work to be adequately supervised.” Segarra fought her dismissal in court but her wrongful termination case was ultimately thrown out. “The experience had eroded my trust in the government’s ability to supervise the financial system and protect the savings of taxpayers,” she writes.

Conclusion / Segarra’s continuous narrative regarding one meeting after another could have been presented better in the book. For example, it would have been helpful for the reader if she had offered a simple scorecard of all the many players at the New York Fed, Goldman, and elsewhere. All the Presidents’ Bankers, a 2015 book also published by Nation Books, did just that.

Maybe she read too much into some of the comments of her colleagues. Maybe working in a bureaucracy was too much for her. Maybe some of her colleagues considered her insubordinate. But even if some of what she has to say in Noncompliant was exaggerated or misunderstood, the picture is very troubling for the fate of megabank oversight.