WASHINGTON — The Federal Reserve announced Wednesday that it is instituting civil fines against Goldman Sachs and initiating proceedings to bar a former executive from the banking industry in connection with repeated leaks of supervisory data from the central bank.
The Fed said Goldman should pay a $36.6 million fine for acquiring and using confidential supervisory information related to the Fed's supervisory program.
The enforcement action also found that, from at least 2012, the bank "did not have sufficient policies, procedures, or adequate employee training in place" to prevent the unauthorized use of confidential information, and ordered Goldman to "put in place an enhanced program to ensure compliance with Board regulations concerning the receipt, use, and dissemination of confidential supervisory information."
Additionally, the Fed initiated proceedings against Joseph Jiampietro, the former managing director of the financial institutions group at Goldman, for "personal dishonesty or a continuing or willful disregard for the safety and soundness of Goldman Sachs" related to the leak of supervisory information.
From 2012 through 2014, Jiampietro allegedly routinely acquired and disseminated confidential supervisory information — known as CSI — related to midsize and regional banking clients, including "confidential CAMELS ratings, non-public enforcement actions, and confidential documents prepared by banking regulators," the Fed said. Before joining Goldman, Jiampietro was a senior adviser to then-Federal Deposit Insurance Corp. Chair Sheila Bair and worked for the Senate Banking Committee.
"By reason of his long career in investment banking, tenure at the FDIC, and work at Goldman Sachs on regulatory and supervisory issues for financial institutions, Jiampietro was aware of the confidential nature of the CSI materials and that his actions were in violation of the law," the Fed said. "Moreover, while at Goldman Sachs, Jiampietro signed at least one client engagement letter in which he acknowledged that Goldman Sachs was restricted from receiving CSI without prior regulatory permission."
The Fed's enforcement action alleges that in 2014, Jiampietro solicited confidential supervisory information from Rohit Bansal, an employee of the Federal Reserve Bank of New York, who was interviewing at Goldman for a job. The Fed alleges that Jiampietro used information acquired from Bansal to pitch regulatory advisory services to financial institutions.
After he was hired by Goldman, Bansal continued to solicit confidential information from another New York Fed employee to further this line of business. Bansal and the Fed employee pled guilty to theft of confidential government property last October and Goldman was fined $50 million by New York State regulators.
Goldman said in a statement that the bank is "pleased to have resolved this matter" and that once the leaked information was brought to the attention of bank leadership, swift action was taken, including notifying the Fed.
"We previously reviewed and strengthened our policies and procedures after Bansal was terminated," the statement said. "We have no tolerance for the improper handling of confidential supervisory information."