A Goldman Sachs Executive Allegedly Stole Government Data to Woo Clients

By Associated Press

04 August 16

The Fed fined the bank on Wednesday for what it called the use and disclosure of confidential materials that the US uses in its supervision of banks

he Federal Reserve fined Goldman Sachs $36.3m for what it called the use and disclosure of confidential materials that the US uses in its supervision of banks.

The Fed ordered the big Wall Street bank on Wednesday to put in place a program to ensure that the alleged violation doesn’t happen again.

Regulators now want to ban Joseph Jiampietro, a former managing director at Goldman, from the banking industry and levy fines against him for the incident that took place more than two years ago.

Jiampietro’s attorney said the Fed’s allegations are false and his client will fight them in the Fed’s legal proceedings.

Regulators say the “confidential supervisory information” obtained by Goldman included reports of bank examinations used by regulators. Goldman employees improperly used and disclosed the confidential information during presentations to clients and prospective clients in an attempt to get their business, they said.

Since at least 2012, Goldman employees lacked proper training and the company didn’t have policies or procedures in place to ensure compliance with disclosure rules, according to the Fed’s order. The central bank said it will “actively monitor” Goldman’s implementation of a compliance program.

It prohibited Goldman from rehiring anyone involved in the alleged violation.

Michael DuVally, a spokesman for the New York company, said: “We’re pleased to have resolved this matter.”

When Goldman discovered that a former employee, Rohit Bansal, had improperly obtained material from the New York Fed, where he had previously worked, the bank immediately notified the Fed and other regulators, DuVally said. Goldman fired Bansal in 2014 and the Fed permanently banned him from the banking industry last year.

“We previously reviewed and strengthened our policies and procedures after Bansal was terminated,” he said in a company release. “We have no tolerance for the improper handling of confidential supervisory information.”

Jiampietro’s lawyer, Adam Ford, said the Fed’s allegations are “demonstrably false, and rely solely on the testimony of a single and inherently incredible witness”, whom he didn’t name.

“As Mr Jiampietro has said from the start, he never requested confidential supervisory information from anyone, and never used it for his or anyone’s benefit,” Ford said in a statement. “The Fed has the law wrong and the facts wrong.”