The New York Times’ Dealb%k reports federal prosecutors in the U.S. are on the cusp of laying criminal charges in a case centring on confidential information leaked by a Federal Reserve Bank of New York employee to a former colleague who had taken a job at Goldman Sachs.
The case puts the spotlight on the much-criticized revolving door between regulator and regulated on Wall Street. “The Goldman banker, Rohit Bansal, previously spent seven years as a regulator at the New York Fed. After Mr. Bansal joined Goldman in July 2014, his boss assigned him to advise one of the same banks he previously regulated, a midsize bank in New York [….]. Soon after, he received government information about that bank from Jason Gross, a former colleague who was still working at the New York Fed,” explains the Dealb%k report.
Both Bansal and Gross were fired after the leak was detected. Sources tell Dealb%k the men would likely face a year in jail if they accept plea deals.
Goldman Sachs says it launched an investigation and notified regulators immediately after learning of the leak. “Nonetheless, the bank is expected to pay a significant price,” notes the report. “Under a tentative deal with New York State’s financial regulator […] Goldman would pay a fine of $50 million and face new restrictions on how it handled delicate regulatory information.”
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