From The Washington Post:
NEW YORK — By 2013, Joseph Jiampietro, a Goldman Sachs managing director, was in a bind. Though recognized as an expert in the wonky world of banking regulation, his bosses expressed concern about his performance.
Jiampetro’s managers told him to “increase the amount of revenue generating business he brought to firm,” court documents alleged.
Before long the investment banker was allegedly scheming to obtain confidential regulatory and government information to help advise Goldman Sachs’ clients, according to government regulators and court documents. Jiampetro coached an employee of the Federal Reserve Bank of New York, Rohit Bansal, on how to get a job with Goldman Sachs and then repeatedly encouraged him to obtain documents from his former employer, federal regulators claim.
The leaks allegedly provided Goldman executives a window into the Fed’s private thoughts on regulatory matters — and helped the executive woo clients, according to regulators.
The Federal Reserve this week ordered Goldman to pay an $36.3 million fine and moved to ban Jiampetro, who has denied wrongdoing, from the banking industry in a case that has become a Wall Street cautionary tale and thrown an embarrassing spotlight on the sometimes cozy relationship between banks and their regulators.
The flow of bankers and government officials between Wall Street and Washington has long been a sore point for public advocates who say it can create conflicts of interest as former bankers and regulators look out for their friends and their next jobs. Goldman Sachs has often been labeled a gateway to high-level Washington jobs — two recent Treasury secretaries, Robert Rubin and Henry Paulson ran the bank for years — gaining it the nickname “Government Sachs.”
Industry officials dismiss those concerns, noting that there are laws in place to prevent conflicts of interest from taking root and that an expertise in banking can make someone a better regulator.
But this time, regulators allege there was a problem.