Goldman Sachs is paying $50 million to settle accusations that an ex-banker took confidential documents from the Federal Reserve Bank of New York – and then pumped a former regulatory worker for more information at Peter Lugers steakhouse.
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The fine Goldman has agreed to pay stems from a former employee, Rohit Bansal, who formerly worked at the New York Fed but moved to Goldman in the middle of a year ago and allegedly began using confidential supervisory materials obtained from a former co-worker at the New York Fed.
US federal prosecutors are preparing to unveil criminal charges against Bansal and former Federal Reserve employee Jason Gross, a person familiar with the matter said on Monday. A lawyer for Bansal could not be reached for comment.
The department said the Goldman employee continue to funnel confidential information to his superiors in violation of his post-employment prohibition. Mr. Gross pleaded guilty to a misdemeanor under a deal with the US attorney’s office for the Southern District of New York, according to his lawyer, Bruce Barket of Barket, Marion, Epstein & Kearon LLP.
New York regulators have resolved an enforcement case against Goldman Sachs for $50 million.
Even after stealing the documents, Bansal pressed Gross for more information about an upcoming exam at Gross’ birthday party on September 23 at Peter Lugers in Brooklyn.
“In March 2014, the Associate was required to resign from his position at the New York Fed for, among other reasons, taking his work Blackberry overseas without obtaining prior authorization to do so and for attempting to falsify records to make it look like he had obtained such authorization, and for engaging in unauthorized communications with the Federal Reserve Board”, DFS said. The current head of the New York Fed, William Dudley, is a former Goldman executive. Segarra sued the New York Fed in 2013 claiming she was sacked for refusing to change findings about Goldman Sachs’ conflict of interest policy.
Goldman must also implement reforms to prevent improper use of confidential information from regulators and boost its compliance with so-called “revolving door” restrictions for former government employees who come work for the bank.
The department said Mr. Gross emailed secret documents to Mr. Bansal’s personal email address, and that Mr. Bansal forwarded them to his Goldman work email.
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Bansal would then circulate a few of these Fed documents to senior personnel at Goldman, including Romanoff and a managing director, Joseph Jiampietro, both of whom were identified not by name but by title by the regulator.
