The U.S. Federal Reserve Board has sanctioned Wall Street giant Goldman Sachs Group Inc. and seeking to sanction a former executive with the firm after finding that the company had used confidential regulatory information in client presentations.
Specifically, the Fed has ordered Goldman Sachs to pay a US$36.3-million civil money penalty and to beef up its controls; and it announced enforcement proceedings against Joseph Jiampietro, a former managing director at the firm, over the alleged unauthorized disclosure of confidential supervisory information.
The Fed says it found that Goldman Sachs employees “improperly used confidential supervisory information … in presentations to its clients and prospective clients in an effort to solicit business for the firm.”
Furthermore, the Fed also found that the firm did not have adequate policies, or training, in place to prevent such improper disclosure.
In addition to the fine, the enforcement order also requires Goldman Sachs to enhance its policies to ensure compliance with the rules regarding the use of confidential supervisory information.
The regulatory order also prohibits Goldman Sachs from re-employing the individuals involved in the improper disclosure of confidential information, or retaining them as consultants or contractors.
In November 2015, the Fed permanently banned Rohit Bansal, a former investment banker at Goldman Sachs, after he pleaded guilty to misdemeanor theft of confidential information that he obtained from a former employee of the Federal Reserve Bank of New York. The former New York Fed employee also pleaded guilty to misdemeanor theft and was permanently banned by the Fed.