The Federal Reserve Board of Governors has ended a 2016 enforcement action against Goldman Sachs Group ordering the bank to pay $36.3 million for the unauthorized use and disclosure of confidential supervisory information from banking regulators.
The termination of the order, announced Tuesday, was effective Nov. 18. No further details were provided.
The Fed fined Goldman Sachs in 2016 after it concluded bank employees improperly used confidential supervisory information in presentations to clients and prospective clients in an effort to solicit business for the firm.
Goldman Sachs also reached a $50 million settlement with the New York State Department of Financial Services (NYDFS) in 2015 regarding similar issues. In the NYDFS settlement, Goldman Sachs voluntarily agreed to a three-year abstention from accepting new consulting engagements that require the NYDFS to authorize the disclosure of confidential information under New York banking law.
In its enforcement action, the Fed ordered Goldman Sachs to discipline the employees involved in improperly disseminating the confidential supervisory information. Goldman Sachs complied by firing several employees, fining others, and barring a number of them from engaging in future work with the bank as a consultant.
Goldman Sachs also agreed to put an enhanced framework in place to ensure the bank’s compliance with Board regulations concerning the receipt, use, and dissemination of confidential supervisory information. The Fed said the framework must have strong governance over compliance risks, so that any “actual or potential compliance risk failures are addressed immediately and escalated appropriately.”
The Fed ordered Goldman Sachs to ensure all documents containing confidential supervisory information the firm acquired without proper authority to be “de-referenced from the firm’s internal systems and rendered inaccessible by firm personnel.” The Board also ordered Goldman Sachs to properly train employees about the risks involved with confidential supervisory information.
In a statement at the time, Goldman Sachs said it was pleased to have resolved the matter and that it reviewed and strengthened its policies and procedures in the wake of the employee misconduct.
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