In Greece, meanwhile, 7,000 plainclothes police officers will be on duty when German Chancellor Angela Merkel visits Athens.

The Securities and Exchange Commission turned to a high-frequency trading firm to help build a system that will help the bank monitor high-frequency trading.

The market for municipal bonds is stuck in the dark ages, writes The Times' Gretchen Morgenstern.

Yoga-practicing, Bruce Springstein lover Barry Rosenstein, the founder of Jana Partners, is the activist investor you can bring home to mama in this profile.

Lehman Brothers' defunct brokerage is getting closer to paying creditors, four years after the firm went under.

Wall Street is anticipating lower corporate profits when companies begin reporting third quarter earnings, but that's not necessarily going to slow the stock market.

HSBC received a court order to bar Occupy protestors from entering its Hong Kong headquarters. The company evicted demonstrators in September after an 11-month occupation.

If only T. Boone Pickens had died ... Bloomberg Businessweek looks at Oklahoma State University's scheme to fund its athletic department by investing in life insurance policies on the program's boosters.

Would you work for Dominique Strauss-Kahn? Female executives are split on the question, according to Bloomberg.

A caddy at East Hamptons Golf Club, where memberships start at $400,000 and Goldman Sachs CEO Lloyd Blankfein is a member, has self-published a book about looping for the rich.

James D. Owen, 48, had worked on mergers and acquisitions and mid-market financing for the telecommunications industry at The Bank Street Group, according to investigative reporter Teri Buhl, who first reported on Mr. Owens' Wall Street connections. Mr. Owen had also worked for Bear Stearns, Lehman Brothers and Banc of America Securities, according to Business Insider. The latter firm was an investment banking subsidiary to Bank of America.

Update (Sept. 25): According to Ms. Buhl, The Bank Street Group says that Mr. Owen was still employed at the firm at the time of his death. The Observer previously reported that Mr. Owen left the firm earlier this year.

New Canaan police responded to gunshots at Mr. Owen's Park Street condominium at around 2:40 p.m. Friday, according to the New Canaan Advertiser, and found Mr. Owen and his wife, Billie Faigout-Owen dead. Police suspect that Mr. Owen shot his wife, then shot himself, according to the paper.

Goldman Sachs' Chief Financial Officer David Viniar will retire at the end of January, the firm said in a press release yesterday. His replacement, Harvey M. Schwartz, will have big shoes to fill. Mr. Viniar “set the gold standard for CFOs across the industry,” analyst Meredith Whitney said in a note, according to Bloomberg. A graduate of Rutgers University and Columbia Business School, Mr. Schwartz joined Goldman through commodities trading unit J. Aron, the same business in which Goldman CEO Lloyd Blankfein and COO Gary Cohn started in the firm.

Lawyers for the bankruptcy estate of Lehman Brothers sued JPMorgan over $2.6 billion in derivatives claims.

Renee Haugerud, the founder of hedge fund Galtere, describes herself as “a tire kicker, not a screen watcher,” in an interview with Bloomberg Markets magazine. Mr. Haugerud renewed her faith in a recent bet on corn futures after noting the dry soil and shorter -than-usual corn stalks at her firm's Minnesota test farm.

Depositors pulled about $425 billion euros from banks in Portugal, Ireland, Greece and Spain in the 12 months ended July 31. Deposit flight is creating a two-tiered banking system that undermines European efforts to save the region's monetary union, according to Bloomberg.

Distressed debt investors such Paul Singer's Elliott Management are running out of fresh carcasses from which to pick their profits, according to The New York Post.

Short-seller Jim Chanos sees no shortage of overvalued stocks, according to Bloomberg.

A Muslim hacker group may have been responsible for a slowdown on the Bank of America website.

UBS plans to cut 80 to 90 jobs in its European investment banking operation by the end of the year, according to Bloomberg.

First went Bob Diamond, who snapped up Lehman's U.S. securities business for Barclays, and who stepped down at the beginning of July after his bank agreed to pay $450 million to settle an investigation into its efforts to manipulate interbank lending rates.

Next fell Nomura chief executive Kenichi Watanabe and chief operating officer Takumi Shibata—who led Nomura's deal for Lehman's European and Asian units—amid an insider trading scandal that roiled the Japanese firm.

This week, it seemed, Barclays and Nomura appeared to pare back their respective global ambitions in tandem. Barclays was first again, naming retail banking chief Antony Jenkins to replace Mr. Diamond as chief executive; Mr. Jenkins told Bloomberg that he was"very confident" about the investment bank, and has previously spoken in favor of the universal banking model. Nontheless, Mr. Jenkins becomes the only CEO of a global, universal bank without an investment banking background, raising speculation that Barclays would back away from Mr. Diamond's quest to build a premier investment bank—a quest defined in part by the Lehman acquisition.

Nomura followed suit today, announcing $1 billion in cost cuts in its wholesale unit in a move that marked a retreat from the play for increased global importance hinged on Mr. Fuld's sloppy seconds. Like Mr. Jenkins, new Nomura CEO Koji Nagai has a background that would suggest a more humble strategy: According to The Times, Mr. Nagai "spent most of his career focused on Nomura’s domestic operations"; last month, Mr. Nagai said he plans to reduce the firm's footprint “to an appropriate size.”

(Carolyn Kaster/AP)

Simple Sandy: Former Citigroup chairman and CEO Sandy Weill went on CNBC yesterday and said we'd all be better off if banks split off their investment banking units. That was a little like Joe Camel swearing off cigarettes, a friend quipped, for Mr. Weill was the driving force behind the creation of the "supermarket" banking model in the 1980s and 1990s. But the banking boss has been simplifying his entire life lately, selling off his penthouse at 15 Central Park West last year, and spending more time in California. "I think that simpler is better. But my life is still not very simple," Mr. Weill told CNBC's Robert Frank.

Drab banking: "There's no sexiness, there's no fun, there's no intellectual intrigue" in banking these days, a former Credit Suisse and Bear Stearns trader tells Bloomberg.

Geithner didn't know...About the "specific conversation" in which a Barclays employ told the Federal Reserve Bank of New York that the British lender wasn't posting an honest Libor rate as early as 2008. Mr. Geithner, who headed the New York Fed at the time and is now Treasury secretary, told the House Financial Services Committee yesterday that he thought the FRBNY took appropriate action by sharing its Libor-related concerns with U.S. and U.K. regulators.

New odds on Grexit: Citigroup economists hung a 90 percent chance on Greece leaving the euro in the next 12 to 18 months.

Pain in Spain: Banco Santander, Spain's largest lender, said profit fell 93 percent in the second quarter as the bank set aside more cash to offset soured loans.

Libor-ated: Employees at Lloyds Banking Group have received subpoenas as parts of investigations by regulators across the globe into the manipulation of Libor and other interbank lending rates, the company said yesterday in announcing second-quarter earnings. Until those investigations have run their course, the bank doesn't see a need to set aside funds to settle civil lawsuits arising from the matter, executive George Culmer told investors on a conference call.

Look out below: Zynga plummeted 37 percent in trading after the close of New York markets yesterday, as the firm announced disappointing second-quarter results. Key Zynga partner Facebook announces earnings today.

Tax hole: The official in charge of multinational effort to tax offshore accounts questioned a report released last week that rich individuals are hiding as much as $32 trillion. "I was wondering where the equivalent of 450 Bill Gates are hiding from everyone," OECD official Pascal Saint-Armans told Reuters.

Early Whale sighting: Bank of England noticed in 2010 that JPMorgan's chief investment office was taking outsized positions in certain markets, but didn't share the observation with regulators responsible for supervising the bank, The Wall Street Journal reports. The trades noted in two years ago were not the same bets on corporate credit derivatives that led to $5.8 billion in losses associated with the London Whale.

Whither Europe: Greece is "hugely off track" from the cost-cutting terms of its most recent bailout package, making it likely that the country will require a further restructuring of its debt, European officials told Reuters. Meanwhile, Spain's borrowing costs are making a sovereign bailout increasingly likely.

What will Libor cost? Investors would like British banks to estimate expected costs of settling investigationsinto the manipulation of interbank lending rates. Barclays paid about $450 million to settle inquiries into its role in the unfolding Libor-rigging scandal; Bloomberg cites one report estimating that civil lawsuits relating to the matter could cost the bank twice as much.

For sale: Former Lehman Brothers chief operating officer Joe Gregory is selling his 15,000 sq. ft. North Shore home, Business Insider reports. The asking price is $22 million.

On second thought... Fun lead in Dealbook: "A technology research analyst who gained notoriety for taunting the federal government over its pursuit of insider trading is expected to plead guilty in United States District Court in Manhattan on Wednesday."

Rare miss: Apple missed Wall Street's estimates for the company's earnings for the second time in nearly 10 years, as iPhone sales fell from the previous quarter.

Bharara sued: The New York Post reports that Yeshiva law student Benula Bensam is suing U.S. Attorney Preet Bharara, the U.S. Marshals and the Department of Justice for unreasonable search and seizure after marshals took her cell phone during the insider trading trial of former McKinsey & Co. CEO Rajat Gupta. Ms. Bensam was pulled from the Southern District courtroom in which the trial was taking place and asked to stop writing letters to the judge.

Lloyd Blankfein testifies at the insider trading trial of Rajat Gupta (r.) as Judge Jed Rakoff looks on. (Shirley Shepard/AFP/GettyImages)

For anyone who’d like to see the bank executives who led America into the teeth of the financial crisis strung up by the laces of their Prada wingtips, a trip to the Southern District courthouse in Lower Manhattan may be a deflating experience.

The Observer had come to the federal courthouse seeking succor. Late last month, Reuters laid hands on an internal memo from the Securities and Exchange Commission declaring its investigation into Lehman Brothers was unlikely to lead to criminal charges. In the time it took Dick Fuld to type “the Bros always wins!!” the SEC was feeding reporters the company line: Lehman prosecutions were still a possibility.

That claim became harder to credit this weekend, alas, when SEC enforcement director Robert Khuzami told C-Span cameras that the worst crisis-era bets on souring mortgage bonds were made below the level of the executive suite. (Hmm. Did someone forget to eat his Wheaties?)

U.S. v. Gupta was supposed to be another story. Southern District U.S. Attorney Preet Bharara has been on an insider-trading tear, after all, winning convictions or guilty pleas in 59 of the 66 cases his office has brought since 2009. In the most high-profile case, the government gained an 11-year sentence for Raj Rajaratnam, the billionaire hedge fund manager caught paying corporate insiders to convey privileged information.

Rajat Gupta was among those who supplied Mr. Rajaratnam inside dope, the government said, alleging the former Mc-
Kinsey & Co. chief executive used his standing as a board director at such corporations as Goldman Sachs and Procter & Gamble to pass secrets to Mr. Rajaratnam’s Galleon Group. In one damning-if-true instance, the government says Mr. Gupta telephoned Mr. Rajaratnam minutes after learning that Warren Buffett’s Berkshire Hathaway was primed to invest $5 billion in Goldman Sachs. Galleon bought Goldman stock—and turned a quick million-dollar profit.

But securities law, it turns out, is not the best fuel for populist outrage. We knew that white-collar prosecutions were notoriously hard to win, that wealthy defendants could spend vast sums on defense lawyers, that the complexities of financial cases could wilt the attention of the perkiest juries. It wasn’t until we’d planted ourselves on the hard wooden pews at 500 Pearl Street that we felt the full gravity of the conventional wisdom.

The resource gap between defense and prosecution was clear on the first day of the trial, when four attorneys from Kramer Levin Naftalis & Frankel huddled in the courtroom with an outside jury consultant, even as junior lawyers back at the firm’s Midtown offices poured over a real-time feed of the trial transcript. The prosecution objected. Surely it wasn’t fair for the defense to employ muscle outside the courthouse to research potential jurors’ names? They might as well outsource the voir dire to a team of freelance Facebook trawlers in Bangalore! But Judge Jed Rakoff—the same cranky legalist who’s made a reputation for hard treatment of financial institutions—allowed the outside help.

It got worse. Though the charges against Mr. Gupta are particularly egregious—a board director at Fortune 500 companies stepping out of a confidential meeting to funnel stock tips to a hedge fund manager is about as morally offensive as insider trading can get—the evidence is largely circumstantial. In its case against Mr. Rajaratnam, the government had smoking-hot wiretaps and corroborating witnesses to prove their case. It still took jurors a week to return a guilty verdict.

The evidence in Gupta was flimsier: witness testimony and phone records indicate that Mr. Gupta and Mr. Rajaratnam spoke around 3:55 p.m. on the day Mr. Buffett announced his Goldman stake, for instance, and in a wiretapped call the next day Mr. Rajaratnam told a Galleon trader that he’d received a tip that  “something good might happen to Goldman.” In a wiretapped call a month later, Mr. Rajaratnam told another trader that “I heard yesterday from someone who’s on the board of Goldman Sachs that they’re going to lose $2 a share, the market has them making $2.50.”

It wasn’t hard to connect the dots, but that doesn’t mean a jury will try.

The defendant, meanwhile, had the best lawyers money could buy poking holes in the government’s case. Since Gary P. Naftalis left a post as a Southern District prosecutor more than three decades ago, he’s been tapped by everyone from Kidder Peabody and Salomon Brothers to Michael Eisner and the former-CEOs of Arthur Andersen and WorldCom. The Times has dubbed Mr. Naftalis “Columbo with a law degree” for the lawyer’s disheveled looks and folksy sense of humor. In Judge Rakoff’s courtroom, Mr. Naftalis appeared as if he’d just stepped out of a rainstorm (it wasn’t raining). The Observer wasn’t fooled, of course, but we were a little bit charmed and certainly discouraged.

Mr. Naftalis is the type of lawyer you get when you have millions in the bank and a strong desire to stay out of prison. He’s the kind of lawyer that the prosecutors on the case, Reed Brodsky and Richard Tarlowe, may dream of one day becoming.

Mr. Naftalis’s goal was to blow some smoke, and he proved adept at it.

“If you’re the defense, the normal procedure is to get the jury confused and bored,” John Coffee, a Columbia law professor, told us. “If they’re bored, they miss the smoking gun when it’s produced. If the defense can get the legal issues convoluted, the jury is unlikely to send a man away over issues they can’t understand.”

He added: “I’ve testified as an expert witness in securities cases and looked over and actually seen jurors sleeping.”

“It’s part of the reason that there are so few criminal prosecutions,” said Steve Thel, a professor at Fordham Law. “Prosecutors are reluctant to take on complicated cases.”

Those selected to sit in judgment of the Gupta case included a registered nurse, an elementary school teacher and a freelance beauty consultant. “I am in awe of our jury because they have managed to remain attentive,” Judge Rakoff said last week, urging lawyers on both sides to make things more interesting.

Assistant U.S. Attorney Brodsky started dumbing down the financial lingo with his very first witness, asking Mr. Rajaratnam’s former executive assistant to define a hedge fund. “It’s a place where stocks are traded,” the witness answered. And we thought it was the loose bills our Auntie Vera keeps stashed in a coffee can to pay for gardening supplies! The next day, Assistant US Attorney Tarlowe asked a witness what an index was. “It’s a stock made up of other stocks,” came the reply.

At least the defense left those definitions uncontested. On day three of the trial, the defense unleashed a barrage of objections to Mr. Tarlowe’s examination of the trader who executed Mr. Rajaratnam’s infamous Goldman trade.

“What does it mean to raise $2.5 billion in a common stock offering?” Mr. Tarlowe asked.

“Objection,” offered the defense. Sustained.

“What is your understanding of what it means to raise $2.5 billion in a common stock offering?” Mr. Tarlowe reworded.

“Objection,” said the defense. Sustained.

“Do you know how a stock offering works?” Mr. Tarlowe attempted.

“Yes,” said the witness.

“How do you know?” asked Mr. Tarlowe.

“Objection.”

“Was that objection on foundation or relevance?” Judge Rakoff chimed in. “Foundation and relevance,” Mr. Naftalis quipped, turning to the press gallery, “and whatever else we can think of.”

There were other moments of drama. After one cross-examination, Mr. Naftalis exclaimed “Got him!” loud enough for the jury to hear. On another occasion, the defense counsel made a thumbs-up as he walked away from the witness stand. Mr. Brodsky complained about the grandstanding. Mr. Naftalis complained about Mr. Brodsky’s treatment of a witness. “I think we’re down to a very polite form of name-calling and that’s not what I want to hear from either counsel,” Judge Rakoff scolded, but the defense had gotten the better of the exchange.

Prosecutors don’t generally try cases they can’t win, and the government may have a key element on its side. “Juries pick up signals from the judge,” said Mr. Coffee. “If the judge is leaning one way or another, the jury tends to lean in the same direction.” Judge Rakoff has developed a reputation in recent years as a thorn in the side of financial firms, most recently blocking an SEC settlement with Citigroup and chiding the watchdog for letting the bank off the hook without either a fine or an admission of wrongdoing. “The most disturbing thing about this case is what it says about business ethics,” Mr. Rakoff told the courtroom in the Gupta case. “It’s not a case of one bad apple, but a bushelful.”

Nor would we trivialize the government’s efforts. If Mr. Gupta used his position as a corporate director to feed Galleon Group profitable secrets, Mr. Gupta should go to jail. But we confess to having held out hope, in whatever naïveté, that the government still had bigger fish to fry. After all, Lehman’s bankruptcy examiner Anton R. Valukas reported that Lehman Brothers moved up to $50 billion in bad assets off the firm’s balance sheet in so-called Repo 105 transactions, concealing the bank’s failing state from shareholders and regulators alike. The SEC is pursuing cases against senior officers at Fannie Mae and Freddie Mac, but the claims seem to stop short of criminalizing the mortgage giants’ role in the foreclosure crisis. Indeed, whatever the government’s chances in Gupta—Mr. Coffee handicapped the trial at 60-40 in favor of a conviction—our visit to Judge Rakoff’s courtroom didn’t do much to engender hope of bigger cases.

There’s another challenge to securing convictions in white-collar cases: tangible victims are often lacking. Indeed, it was Mr. Gupta—a silver glint in his combed-back hair, mouth frozen in a dignified grimace—who gave off the air of the wronged party. Behind him sat two benches full of supporters, often including his daughters, who looked just as polished as you would expect from a foursome who holds seven Ivy League degrees. What’s that you say? What about the shareholders in the firms Mr. Gupta allegedly betrayed, or the taxpayers who propped up failing financial institutions?

We suppose those victims were everywhere in the Southern District courthouse, whether they realized it or not.

pclark@observer.com

Michael Tory, former head of U.K. investment banking at Lehman Brothers, just published an op-ed in the Financial Times suggesting that what European policymakers need most right now is not to pull the region's tenuous economy back from the ledge but to get down on their knees and take a good hard look into the darkness that awaits (subscription required). That's right, the region needs a "Lehman moment," Mr. Tory writes in a brave bit of rationalization. In Mr. Tory's telling, the U.S. Congress lacked the will to tackle broader systemic weakness, both because people believed the banks had brought the problems on themselves, and because opposing political parties only get along when they have to:

The Lehman moment decisively addressed the second problem by providing a good stare into the abyss. The political will to implement a comprehensive solution was almost immediately mobilised. For all their flaws, the measures achieved their primary goal of preventing further big failures and so stabilised depositor and investor confidence—contrast the health of the US banking sector today with that of Europe.

We don't think he's wrong, although we're not sure if we should cringe at or applaud the gall of a former-Lehman banker suggesting Greece should take one for the team. Oh, yes, to have a Lehman moment, someone has to fail:

The parallel with the eurozone today should now be obvious. To restore stability, the eurozone needs to institute jointly guaranteed eurozone bonds underpinned by ironclad and enforceable centralised fiscal discipline; eurozone-wide deposit insurance; and mandatory recapitalisations. But political will to do this will not be fully mobilised as long as the alternative of “buying time” appears available: politicians will always choose that option if it is open to them. Even more importantly, the necessary political will cannot be mobilised as long as any of the main beneficiaries, such as Greece, are seen as undeserving.

Greek default and eurozone exit would address both of these issues. After a Greek exit, eurozone leaders would not be able to buy further time. They would face a very clear choice: unite immediately behind a comprehensive fix to secure the countries next in line (Spain, Portugal, Ireland etc) or watch the entire eurozone project disintegrate.

There are some in Greece who seem happy enough to arrange this.

[Photo: David Shankbone]

"This seems extreme," Tonucci wrote in an e-mail on June 12 to Moody's executive Blaine A. Frantz. "Is there any way to appeal?"

It’s funny now, when Moody’s action—it placed a negative outlook on Lehman’s debt on June 9, and put the bank’s A1 rating on downgrade watch on June 13—looks anything but extreme. Even Fitch, which took a stronger stance when it downgraded Lehman to A+ from AA- on June 9, would seem restrained three months later, when Lehman’s debt was slashed to junk status following the firm’s disastrous third quarter.

Well, the story from there has been told and retold. What we read in documents from the Lehman Chapter 11 is a company in middle stages of desperation: If Fuld and Tonucci couldn't convince the ratings companies, at least the executives might convince themselves.

Again from the desk of Tonucci, this time to Fitch managing director Eileen A. Fahey, after receiving a draft of the press release announcing the imminent downgrade:

Fahey's response:

“I work on a lot of the same issues,” said Ms. Pinsky, who married Economic Development Corporation head Seth Pinsky last summer. “The thing about the real estate industry, it’s very civic minded. Many owners are family businesses and there’s this strong tradition in the industry of wanting projects and policies that are best not just for the industry’s own interests, but for the entire city.

Angela Pinsky. (Photo by Kiki Conway)

Landlords know that their success and the health of their investments depend on the health of the city as a whole.”

Ms. Pinsky joined the mayor’s office during the heady first years of the Bloomberg administration, a period of sweeping vision, and bore witness firsthand to how real estate could provide government with the levers for urban change.

Starting as then-Deputy Mayor Dan Doctoroff’s chief of staff, one of the first projects she worked on was the rezoning of the Williamsburg and Greenpoint neighborhoods in Brooklyn, a process that would eventually allow a wave of residential development to sprout in the area. The neighborhood’s potential wasn’t as easy to see then. Ms. Pinsky lived in Williamsburg at the time, near the waterfront, an area that was a forlorn stretch of derelict-looking industrial buildings.

“If you didn’t get dinner by 6:00 you weren’t going to eat that night,” Ms. Pinsky said. “It’s hard to believe looking at the neighborhood today, but there weren’t grocery stores or restaurants back then.”

The area was already gaining momentum as a place for artists and hipsters and for its proximity to Manhattan. The rezoning, though, kicked that transformation into high gear and made the neighborhood the magnet for living, culture and nightlife that it is today. The project was just one of many seeds of revitalization that the administration sought to plant around the city, a bold agenda that galvanized Mrs. Pinsky’s view of real estate as a tonic that could cure the city’s ills.

“I worked on the Olympic bid and PlaNYC,” Ms. Pinsky said. “There was the feeling that you were never doing enough.”

Mayor Bloomberg arranged the office in City Hall as a large bullpen with everyone sitting at open workstations. His was, and still is, at the center of the room. Ms. Pinsky sat near the periphery, but the layout avoided isolation and permitted everyone in the room to feel within the fold of the office’s work.

“You could hear what the mayor was talking about on the phone and you always had an awareness of what was going on,” Ms. Pinsky said. “There were no silos. That was one of the great things about the administration—it was transparent.”

She remembers Mayor Bloomberg as having a photographic memory and a talent with data. “Numbers are part of his body,” Ms. Pinsky said. “But he was also very instinctual. The mayor would do the research and then trust his gut.”

Mr. Doctoroff, who left city government in 2007 to become the chief executive of Mayor Bloomberg’s financial information company, Bloomberg LP, was more analytical. “Dan wanted analyses down to the penny and he would ask you little details to see if you knew about a project inside and out,” Ms. Pinsky said.

Ms. Pinsky grew close with Mr. Doctoroff. She said he still checks in on her. “I had a very strong attachment to Dan,” Ms. Pinsky said. “I was young and had a lot to learn. I was timid. Working in that situation makes you learn about decision-making. I grew up a lot in that role. Dan still calls all of us. He’s very protective.”

Mrs. Pinsky stayed on when Mr. Doctoroff left, maintaining her position as a chief staffer for Bob Lieber, a former Lehman Brothers executive who was hired as Mr. Doctoroff’s successor in the role of deputy mayor of economic development. Mr. Lieber was less of a visionary than Mr. Doctoroff, according to Ms. Pinsky, but had a clear talent for negotiating deals, skills that Ms. Pinsky would also soon come to appreciate.

One of the first issues they handled together was what to do with Off Track Betting. The parlors were oozing red ink, Ms. Pinsky said, largely because the city and state took money out of its total revenue rather than its profits. “OTB expenses were rising and there was nothing to compensate it for that,” Ms. Pinsky said.

Mr. Lieber helped devise a solution in which the city and state would share a cut of OTB’s profits only, an approach that would pad its bottom line. He worked hard to align various interests in the state that would permit the idea to be implemented. But the negotiations bogged down and eventually he retreated, arranging a deal that would allow the state to take control of the organization. A year later, it was shuttered.

Mr. Lieber’s efforts had paid off in one sense; the city was no longer on the hook for OTB’s $500 million of pension and other liabilities. Still, it was demoralizing to see how such a common-sense solution could meet defeat when OTB’s inevitable demise had been so widely predicted.

By the spring of 2010, with the economy and government-spurred developed in slow gear due to the recession, Ms. Pinsky was ready for change. Mr. Lieber had left office to return to the private sector, taking a job at C3 Capital Partners. She soon got her own chance to switch over as well. “Mike Slattery, an executive at REBNY, called me in,” Ms. Pinsky said. “I wasn’t expecting it but they had an opening.”

For REBNY, Ms. Pinsky was a hugely attractive hire, as she had not only valuable connections in city government, but also a close feel for how it works. Having staff with Ms. Pinsky’s skill set and experience has been essential for the city’s real estate industry, whose health depends not just on economic winds but as much on the burdens and restrictions that government places on it too.

In recent months Ms. Pinsky has been working on a range of issues. Taxes on carried interest, an investment structure typically employed by hedge funds but also by some real estate partnerships, will likely be raised from the current capital gains rate. Ms. Pinsky and other lobbyists hope to segregate real estate from the issue, which has been focused at increasing taxes specifically for investment funds.

The outcome of their efforts could have a profound effect on how ownership structures are arranged in the real estate business. Closer to home, the City Council is grappling with whether to pass living-wage legislation, a regulation hotly opposed by the city’s real estate industry. The requirement primarily affects retail tenants, forcing them to pay higher wages to employees in buildings that receive city subsidies or incentives.

The issue is what brought down a bid by the Related Companies to redevelop the Kingsbridge Armory in 2009, when Bronx Borough President Ruben Diaz backed instituting requirements that would have forced Related’s tenants in the project to pay the higher wage rate.

“Related couldn’t build under that requirement,” Ms. Pinsky said. “Retailers aren’t going to go to a building if they can get space across the street that’s cheaper. And developers know that and they’re not going to build if they can’t be as competitive.”

Ms. Pinsky, née Sung, got married to Seth Pinsky last summer. At least on the surface, the marriage seems like a well-suited match. Mr. Pinsky is the head of the city’s Economic Development Corporation, the pseudo government agency that the mayor’s office uses as one of its primary arms of economic development. Mrs. Pinsky said that she and her husband are actually quite different. “It really was a case of opposites attracting,” Mrs. Pinsky said. “I like dance music, he listens to nothing but classical. I’m very social and he tends to be more introverted.”

While Mrs. Pinsky would have preferred a getaway like Hawaii for their honeymoon, Mr. Pinsky chose the Sudan and then Egypt. Mr. Pinsky prefers exotic, out-of-the-way destinations that sometimes verge on risky. He was days away from visiting North Korea before the government there canceled his papers permitting entry. He went to Iran earlier in their relationship without Mrs. Pinsky.

“We had a safe word,” Mrs. Pinsky remembers. “Waffles. If he got captured and said that, I knew to send the U.S. government.”

The travel, especially in former Soviet countries, an area that fascinates Mr. Pinsky, has afforded her a perspective on infrastructure here.

“You can compare what they have in other cities and see where it has gone right and wrong and, also, what we do that is right and wrong,” Mrs. Pinsky said. “I still want to go to Hawaii.”

DGeiger@Observer.com