The U.S. Federal Reserve has slapped a fine totaling $36.3 million on Goldman Sachs for leaking confidential Fed documents. The bank has used data on examinations of the state of the banking sector in its possession to entice new and existing clients to deal with the bank. In effect Goldman Sachs has used insider information to lure in clients.
The Federal Reserve board is also chasing a fine and a permanent bar from the industry for former Goldman Sachs Managing Director Joseph Jiampietro. He and his subordinates were the ones to indiscriminately used the data in possession of Goldman Sachs to solicit new business for the firm.
The announcement follows up on an interview of former UBS trader Kweku Adeboli who stated in an interview with the BBC aired on Monday that the culture of profiting ‘no matter what’ the risks and the costs are is still intertwined in the banking industry.
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Goldman Sachs is forbidden from re-employing individuals involved in the dissemination of confidential Fed information
According to the findings by the Federal Reserve, Goldman Sachs hasn’t had sufficiently agile procedures in place to ensure that its employees did not engage in compliance violations related to the use of confidential information.
The U.S. central bank has stated that it is mandating Goldman Sachs to actively supervise the activities of its senior management in this regard and will be monitoring if the bank complies with the regulatory framework.
According to the order issued by the Federal Reserve, Goldman Sachs is forbidden from re-employing individuals involved in the dissemination of confidential Fed information. Back in November 2015, the Fed already permanently barred an ex-employee of Goldman Sachs after his guilty plea.