Fed fines Goldman Sachs $36.3M over leaked documents

Goldman Sachs Group (GS) on Wednesday agreed to a $36.3 million settlement over Federal Reserve Board allegations that the investment banking giant used secret information from the central bank in a bid to win new business.

The Fed also said it has launched an enforcement action that could result in a $337,500 fine and permanent ban from the banking industry for Joseph Jiampietro, a former Goldman managing director who allegedly obtained and used similar "confidential supervisory information," such as reports of bank examinations.

Jiampietro's alleged misconduct involved "personal dishonesty or a continuing or willful disregard for the safety and soundness of Goldman Sachs," the Fed charged in an enforcement filing.

Goldman Sachs spokesman Michael DuVally noted that the company had terminated Jiampietro over his alleged role in the episode.

The Fed settlement requires the company to improve its internal security policies to prevent any further breaches. The central bank's order also bars Goldman Sachs from rehiring individuals involved in improper disclosure of central bank secrets or retaining them as consultants or contractors.

Goldman Sachs in a statement said it was pleased to have resolved the Fed allegations. The New York City-based bank also said it had reviewed and strengthened its oversight policies and procedures.

"We have no tolerance for the improper handling of confidential supervisory information," the bank added.

The Fed penalty follows the bank's $50 million settlement in October with the New York Department of Financial Services over allegations that another former Goldman Sachs employee  illegally obtained roughly 35 confidential documents from a former co-worker at the New York Fed.

The ex-employee, Rohit Bansal, allegedly used the documents for use in advising a business client.

Follow Paste BN reporter Kevin McCoy on Twitter: @kmccoynyc