Goldman Sachs Group Inc. fired two bankers after one of them allegedly shared confidential documents from the Federal Reserve Bank of New York within the firm.
A junior banker, who had joined the company in July from the New York Fed, was dismissed a week after the discovery in late September along with another employee who failed to escalate the issue, according to an internal memo obtained by Bloomberg News that didn’t identify the pair. Jake Siewert, a bank spokesman, confirmed the contents of the memo, which was prompted by a report yesterday in the New York Times.
“We have zero tolerance for improper handling of confidential information,” Goldman Sachs said in the memo. “We are reviewing our policies regarding any hiring from governmental institutions to ensure that they are appropriately effective and robust.”
The bank and the New York Fed have faced questions about their relationship since a former examiner, Carmen Segarra, said her ex-colleagues at the regulator were too deferential in their oversight of the New York-based firm. She gave what she said were secretly recorded conversations with those co-workers to the radio program “This American Life” in September.
What Your Peers Are Reading
U.S. Senator Sherrod Brown, an Ohio Democrat, scheduled a hearing for tomorrow before his banking subcommittee on “regulatory capture” following Segarra’s claims. On the same day her recordings became public, Goldman Sachs changed its policy addressing conflicts of interest to bar investment bankers from trading individual stocks and bonds.
The banker, Rohit Bansal, forwarded an e-mail from Fed employee Jason Gross that contained confidential supervisory information to members of his team on Sept. 26, according to a person briefed on the matter. An investigation indicated that a more senior banker, Joseph Jiampietro, had earlier received inappropriate information from Bansal, said the person, who asked not to be identified discussing private matters.
“Mr. Jiampietro never knowingly or improperly reviewed or misused confidential supervisory information,” his lawyer, Adam Ford, said in a statement. “He should not have been terminated. Any compliance failings regarding Mr. Bansal had nothing to do with Mr. Jiampietro.”
The New York Fed also dismissed Gross for sharing information with Bansal, according to two people briefed on the matter.