Wednesday, August 3, 2016
The Federal Reserve Board announced its enforcement actions against Goldman Sachs from 2012-2014 events where a Goldman Sachs banker, a former NY Fed employee, received confidential documents from a NY Fed employee. The individuals involved plead guilty to the resulting charges and Goldman Sachs paid fines in New York. The Federal Reserve Board took separate actions this week based upon evidence that the banker "repeatedly obtained, used and disseminated [confidential supervisory information or CSI] ... including CSI concerning financial institutions’ confidential CAMELS ratings, non-public enforcement actions, and confidential documents prepared by banking regulators." Even though Goldman Sachs terminated the banker involved and reported the matter to authorities, apparently the misconduct was sustained over a long-enough period of time and used to "solicit business" in a way that compelled Federal Reserve Board Action.
The Fed's release and copies of the orders are available here. The sanctions against Goldman Sachs include the monetary fine as well a requirement to 'Within 90 days of this Order, ...submit to the Board of Governors an acceptable written plan, and timeline for implementation, to enhance the effectiveness of the internal controls and compliance functions regarding the identification, monitoring, and control of confidential supervisory information."
Financial press coverage of the matter is available in a variety of outlets: