The Federal Reserve is preparing to fine Goldman Sachs because one of the firm’s bankers in 2014 conspired to receive confidential information from an official at the New York Fed.
Penalties aren’t expected to exceed the $50 million in fines that Goldman has already paid to state regulators as a result of the leak, according to The New York Times, which broke the story of the new enforcement action on Monday.
Fed officials are also considering punishing the former superior of the now-ex Goldman employee at the heart of the affair. Both were fired by the bank in 2014 as a result of the fiasco.
The junior staffer, Rohit Bansal, pleaded guilty in November to misdemeanor charges for his role in the case. He is now cooperating with federal investigators, the Wall Street Journal noted, as per his plea deal.
The financial broadsheet named Bansal’s former superior as Joseph Jiampietro. It said Jiampietro would contest any charges brought by the Fed.
The move appears to mark “a broader effort at the Fed to address Wall Street misdeeds and ramp up enforcement efforts against individual bankers,” the Times noted. The number of bankers barred by the industry doubled in 2015, albeit from one single digit number to another–from three to six. Not a single banker had credentials revoked by the Fed in 2013.
The case was also described as “awkward” by the Times due to its blatant illustration of the so-called revolving door between the government and private sector. Bansal had previously worked for seven years at the New York Fed. The leak affair and Bansal’s subsequent termination from Goldman happened just three months into his position at the firm.
“The banker came to Goldman with a job reference from a New York Fed official,” the Times said, of Bansal. In previous reporting on the leak, the paper has pointed out that Goldman is often jokingly called “Government Sachs.”
The New York Fed is the most important regional arm of the Federal Reserve System, given the location of Wall Street, in lower Manhattan.
