In a rare criminal action on Wall Street, an Indian-origin former Goldman Sachs banker, Rohit Bansal, 29, suspected of taking confidential documents from a source inside the government, has pleaded guilty. The ex- Goldman Sachs worker in all probability will face jail amid criminal charges and the Federal Reserve Bank (FRB) of New York is expected to permanently bar Bansal from the banking industry.
“Rohit Bansal and his source Jason Gross, who at the time of the leak was an employee at the Federal Reserve Bank of New York, will accept a plea deal from federal prosecutors under which they could go to prison for up to a year”, the New York Times reported.
The settlement would force Goldman to take the ‘rare’ step of acknowledging that it failed to adequately supervise the culprit "thrusting the bank back into the spotlight just as it was beginning to overcome a popular image as a firm willing to cut corners to turn a profit". In a statement, issued by the bank said that the banker worked for the firm for less than three months and the bank, "immediately began an investigation and notified the appropriate regulators", once it detected the leak.
Prior joining Goldman in July 2014, Bansal had previously spent around seven years as a regulator at the New York Fed. When Bansal left the Fed to join Goldman, he was the "central point of contact" for certain banks. At Goldman, he joined a unit within the investment bank that advises other financial institutions on mergers and other deals, and was assigned to advise one of the midsize banks, he previously regulated, a role that presented him with a potential conflict of interest. It is alleged that soon Bansal received government information about that bank from his former colleague.
The step is considered as the ‘rare’ for a Wall Street banker to face criminal charges, not a single Wall Street chief executive was charged post the financial crisis even as many bankers and traders have faced charged in a few investigations.
As per the compensation, Goldman will be paying around 50 million dollar fine (GS 0.81%) and will now face new restrictions on how it will be handling the delicate regulatory information, going forward. In addition to the compensation and the admission that it failed to supervise its employee, Goldman will also accept a three-year suspension from conducting certain consulting assignments with banks in the New York State.