Goldman Sachs share price down, axes two employees over information leak

Goldman Sachs Group Inc fired two employees, after one of them allegedly accessed confidential information from the Federal Reserve Bank of New York.

Goldman reported that in September it had fired Rohit Bansal, a junior employee, and then laid off his supervisor Joe Jiampietro, a senior banker in the financial institution. Goldman executives wrote that Mr. Bansal, a former employee of the Federal Reserve Bank of New York, had sent a document to colleagues that included sensitive bank-supervisory information.

“That policy explicitly states that work or any proprietary or confidential information should not be brought into the firm or used by you or disclosed to others at the firm without the express permission of those previous employers” the executives added.

Mr. Jiampietro was a top adviser to Sheila Bair during the time she was a chairman of the Federal Deposit Insurance Corporation.

“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” the New York Fed said in a statement.

Goldman said that another senior employee reported the incident to the division’s compliance unit, and its general counsel alerted the New York FED.

The bank has a reputation for having a tighter relationship with authorities and has been nicknamed “Government Sachs”, in addition some of its employees had previously worked at government agencies, including the Fed and U.S. Treasury. Goldmans ex-CEO Hank Paulson left the company to become U.S. Treasury secretary for the 2006-2009 period.

The incident became known as the Senate banking committee prepares to examine the banks influence over its regulators. On Friday the regulator will go over allegations from a former New York Fed examiner Carmen Segarra, who says she was wrongfully fired.

Ms. Segarra said she was terminated because her bosses wanted her to tune down criticism of Goldman. The former employee had sued the Fed and two supervisors last year. William Dudley, president of the New York Fed and ex-managing director at Goldman, is due to testify of Friday.

“We have zero tolerance for improper handling of confidential information. We are reviewing our policies regarding any hiring from governmental institutions to ensure that they are appropriately effective and robust” said Goldman.

Goldman Sachs Group Inc lost 0.24% on Wednesday and closed at $189.19 in New York, marking a one-year increase of 13.56%. The company is valued at $82.60 billion. According to the Financial Times, the 20 analysts offering 12-month price targets for have a median target of $190.00, with a high estimate of $218.00 and a low estimate of $138.00. The median estimate represents a 0.43% increase from the last price of $189.19.