Goldman Settles Fee Dispute With Ex-Manager Over Leak Probe

  • Joseph Jiampietro had sued bank for $350,000 in legal fees
  • Ex-manager, once target of federal probe, was fired in 2014

Goldman Sachs Group Inc. settled a former executive’s claim that it wrongfully refused to reimburse at least $350,000 in legal fees tied to his involvement in a government probe of leaked Federal Reserve documents.

Joseph Jiampietro, an ex-managing director at the company’s investment banking division, sued the bank in Delaware Chancery Court over fees he racked up while defending himself in the investigation. No criminal charges have been filed against him over the leaked documents. Goldman agreed to settle the case and a counterclaim it had filed in state court in New York seeking arbitration. 

The confidential settlement follows New York-based Goldman Sachs’s agreement to pay $36.3 million to resolve federal regulators’ claims that the bank used information from the leaked documents in client presentations to help solicit business.

Michael DuVally, a spokesman for the bank, declined Tuesday to comment on the agreement. Adam Ford, an attorney for Jiampietro, also declined to comment. The accord was made public in court documents filed Sept. 19 in Manhattan and Sept. 22 in Delaware.

Similar Case

Goldman’s willingness to resolve the lawsuits stands in contrast to the bank’s handling of similar legal-fee claims filed by Sergey Aleynikov, a former computer programmer accused of stealing high-frequency-trading codes.

The bank refused to pay Aleynikov’s legal fees tied to criminal charges over the theft allegations, and a Delaware judge ratified that decision in July. Aleynikov argued his vice-president’s title made him eligible to be reimbursed for legal costs. The bank countered that the programmer was in a non-supervisory role and didn’t fit the definition of a corporate officer entitled to such perks.

Federal Reserve officials are pursuing a $337,500 fine and a permanent banking ban against Jiampietro over his unauthorized use of the agency’s secrets. The former banker is fighting the regulatory action.

Plot Allegations

Regulators alleged Jiampietro -- an investment banker who formerly worked at the Federal Deposit Insurance Corp. -- received business information gathered by the Fed in its supervisory role and used it to help bring in clients for Goldman Sachs.

One of Jiampietro’s subordinates, Rohit Bansal, was accused of sharing the confidential documents he got from a New York-based Fed employee with his boss in 2014. Both Bansal and the government worker, who had worked together previously, pleaded guilty to stealing government property. Last year, the Fed banned Bansal from getting another banking job. In June, the U.S. Securities and Exchange Commission also barred him from the securities industry.

The Delaware case is Jiampietro v. Goldman Sachs Group Inc., CA12601, Delaware Court of Chancery (Wilmington). The New York case is Goldman Sachs v. Jiampietro, 654364/2016, New York State Supreme Court, New York County (Manhattan.)

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