Ex-N.Y. Fed Employee Avoids Prison for Leaking Documents

  • Staffer handed over confidential files to Goldman Sachs banker
  • Prosecutors sought sentence of at least six months in prison

A former staff member at the Federal Reserve Bank of New York was sentenced to a year of probation for leaking confidential information to his ex-boss, who was then a junior banker at Goldman Sachs Group Inc., according to the U.S.

Jason Gross admitted last year that he passed documents, including information from the regulator overseeing a midsize New York bank that his former boss Rohit Bansal’s group at Goldman Sachs was advising. Bansal worked for the government for seven years before leaving in 2014 to join Goldman Sachs.

In addition to probation, Gross was ordered to pay a $2,000 fine and perform 200 hours of community service, said Christian Saint-Vil, a spokesman for Manhattan U.S. Attorney Preet Bharara. Prosecutors had asked U.S. Magistrate Judge Gabriel Gorenstein to sentence Gross to six to 12 months in prison for the misdemeanor theft of government property conviction.

The case highlights problems with the so-called revolving door between government and Wall Street, which offers former regulators the chance to work for institutions they once oversaw at much higher salaries.

Guilty Plea

Gross pleaded guilty in November to sending more than 30 documents to Bansal on 20 occasions, according to court filings in a $50 million settlement between Goldman Sachs and the New York Department of Financial Services.

Gross sent the documents to Bansal’s personal e-mail address, and the ex-Fed employee forwarded them to his Goldman e-mail account, court filings show. Bansal then circulated some of the New York Fed documents to senior Goldman personnel, prosecutors said.

The documents gave Goldman an unfair advantage because they provided real-time insight into the New York Fed’s private thinking about the New York bank’s operations, prosecutors argued in court filings.

Prosecutors wanted jail time to underscore “the seriousness of the offense,” according to a letter they sent to Gorenstein in February about Gross’s sentencing. “The defendant, who was highly educated and made more than $100,000 per year working at FRBNY, showed a blatant disrespect for the law by disseminating documents he knew were confidential.”

Gross’s actions “directly contradicted and frustrated” the New York Fed’s “ability to supervise banks and ensure the security of our financial systems,” the prosecutors added.

Bansal, who also pleaded guilty to theft of government property, is slated to be sentenced March 22. He also asking for no prison time in connection with his conviction, according to court filings.

Prosecutors said in a court filing Wednesday that Bansal should be sentenced to prison for as long as a year.

The case is U.S. v. Gross, 15-cr-00766, U.S. District Court, Southern District of New York, (Manhattan).

Related tickers:
GS US (Goldman Sachs Group Inc.)
8765Z US (Federal Reserve Bank of New York)

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