Goldman Sachs Group Inc. has agreed to pay $ 36.3 million to settle allegations by the Federal Reserve that it obtained and used confidential regulatory materials from the central bank two years ago.
The penalty comes after the bank already paid $ 50 million in October last year to banking regulators at the New York State Department of Financial Services for failing to properly supervise the former employee that stole and shared the Fed secrets.
In announcing the settlement Wednesday, the Fed said it fined Goldman "for its unauthorized use and disclosure of confidential supervisory information." It also required Goldman to improve its internal controls and training for compliance purposes.
The Fed also is seeking to ban permanently from the banking industry Joseph Jiampietro, who was a managing director at Goldman on the same team as the person who obtained the documents. The Fed said Mr. Jiampietro, who was fired by Goldman in October 2014, showed "personal dishonesty" in the incident and was fine $ 337,500.
The person who obtained the secrets was Rohit Bansal, whom Goldman fired in 2014 and whom the Fed banned permanently from the banking industry last November. Mr. Bansal received the documents from Jason Gross, a former colleague at the Federal Reserve Bank of New York. Mr. Gross was fired by the New York Fed and sentenced in court after pleading guilty to the charges.
In levying the fine on Goldman, the Fed said its own investigation of the case found that the bank used the confidential materials in its presentations to clients and from 2012 had insufficient policies and procedures in place for employees' handling of such sensitive materials.
Goldman has agreed to step up those controls and not to rehire as consults or employees anyone who was involved in the improper disclosure of regulatory information.
Michael Duvally, a spokesman for Goldman, said the bank was "pleased to have resolved this matter." Upon discovering the leak of the sensitive documents to Mr. Bansal in 2014, Goldman immediately notified regulators at the Fed, he said, and introduced new controls and put the bankers involved on leave.
"We previously reviewed and strengthened our policies and procedures after Bansal was terminated," Mr. DuVally said. "We have no tolerance for the improper handling of confidential supervisory information."
Adam Ford, a lawyer for Mr. Jiampietro at Ford O'Brien LLP, said his client is innocent and they planned to fight the Fed charges.
"The allegations filed against Mr. Jiampietro are demonstrably false," said Mr. Ford in a statement. He said Mr. Jiampietro "never requested confidential supervisory information from anyone, and never used it for his or anyone's benefit. The Fed has the law wrong and the facts wrong."
Scott Morvillo, a lawyer for Mr. Bansal, couldn’t immediately be reached for comment.
Write to Katy Burne at katy.burne@wsj.com
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