Thursday, November 20, 2014

Goldman Sachs Fires Staff for Alleged NY Fed Breach

Note to banksters: If you are doing dirty work, never get caught.

Unless you are a major player you will be cut loose immediately and thrown to the wolves.

Case in point, Goldman Sachs has fired an investment banker who allegedly accessed confidential information from the Federal Reserve Bank of New York.

Goldman said it had fired Rohit Bansal, a junior employee, in September and then fired his supervisor Joe Jiampietro, a senior banker in the financial institutions group.

The New York Fed said: ”As soon as we learned that Goldman Sachs suspected one of its employees may have inappropriately obtained confidential supervisory information, we alerted law enforcement authorities.”

NYT had this to say about Jiampietro's crony, revolving door ties, when Goldman hire him in February, 2011:
 Joseph Jiampietro, one of the government’s top deal makers during the financial crisis, has joined Goldman Sachs as a senior investment banker covering the financial services industry.

Mr. Jiampietro was previously a senior adviser to Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation, during the throes of the financial crisis, where he helped coordinate more than 100 government-assisted bank deals.

He was also one of the chief architects of the F.D.I.C.’s policies on private equity involvement in the banking industry and was Ms. Bair’s main liaison to hedge funds and the broader Wall Street community. He left the F.D.I.C. in August, after serving for just over a year.

THE BIG QUESTION: Will we hear how this breach occurred? Was their an accomplice inside the Fed?


Yves Smith's take:
The idea that Goldman’s decisions are driven by simple reputational considerations rather than a desire to comply is reinforced by the leakage of this story to Wall Street’s most friendly news outlet, the New York Times’ Dealbook, prior to Senate hearings...  this Friday. The bank clearly wants to spin this new PR problem as them being pro-active and dealing with a bad situation promptly, when it looks like they actually waited until events forced their hand.

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