Friday, August 19, 2016

Goldman seeks to force ex-employee in Fed leak case to arbitrate

A view of the Goldman Sachs stall on the floor of the New York Stock Exchange July 16, 2013. REUTERS/Brendan McDermid
A view of the Goldman Sachs stall on the floor of the New York Stock Exchange July 16, 2013. REUTERS/Brendan McDermid

Goldman Sachs Group Inc (GS.N) filed a lawsuit on Thursday seeking to force a former managing director to arbitrate his claim for legal fees stemming from probes into his alleged use of confidential Federal Reserve documents. The lawsuit was filed in New York state Supreme Court in Manhattan against Joseph Jiampietro, an ex-Goldman employee whom the Federal Reserve Board this month brought an enforcement case against. Goldman's lawsuit came after Jiampietro in July sued the bank in Delaware Chancery Court seeking to force it to cover at least $350,000 in legal expenses stemming from probes by the Federal Reserve and the Financial Industry Regulatory Authority in 2015. Adam Ford, a lawyer for Jiampietro, in a statement called Thursday's lawsuit "a classic example of inappropriate forum shopping" by Goldman Sachs to delay advancing his client's defense fees.

The Fed brought enforcement proceedings against Jiampietro on Aug. 3, the same day it announced a $36.3 million settlement with Goldman Sachs for the unauthorized use and disclosure of confidential information. The Fed alleged that Jiampietro in 2014 on multiple occasions asked Rohit Bansal, a Goldman associate who previously worked at the Federal Reserve Bank of New York, to obtain confidential information from a New York Fed employee. The information was then used by Jiampietro and Bansal in connection with Goldman Sachs' regulatory advisory work for current clients and pitches to potential clients, the Fed said.The Fed is seeking to fine Jiampietro and bar him from the banking industry. Jiampietro denies wrongdoing. Bansal and the former New York Fed employee, Jason Gross, both pleaded guilty in November to a misdemeanor charge of theft of government property, and were sentenced to probation in March. The criminal case came after an earlier related $50 million settlement by Goldman Sachs in October with the New York Department of Financial Services. The case is The Goldman Sachs Group Inc v. Jiampietro, New York State Supreme Court, New York County, No. 654364/2016.
(Reporting by Nate Raymond in New York; Editing by Cynthia Osterman)
This article was first seen on Reuters