NEW YORK, Nov 4 (Reuters) - An ex-employee of the Federal Reserve Bank of New York suspected of leaking confidential information to a former colleague working at Goldman Sachs Group Inc is expected to plead guilty on Wednesday, according to a court official.
Jason Gross, 37, is expected to appear in federal court in Manhattan for a scheduled plea hearing, according to the court official, days after Goldman Sachs reached a related $50 million settlement with the New York Department of Financial Services.
Rohit Bansal, a former Goldman Sachs associate suspected of obtaining confidential information from Gross for use in advising one of the bank’s clients, is separately scheduled to appear for a plea hearing on Thursday, the court official said.
Bruce Barket, Gross’ lawyer, confirmed Wednesday’s hearing. He has previously said his client had agreed to plead guilty to a misdemeanor.
Scott Morvillo, Bansal’s lawyer, confirmed his client would appear in court on Thursday. A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined comment.
The case highlighted the so-called revolving door on Wall Street, in which regulators regularly go to work for the banks they once oversaw, and fueled critics who say the Federal Reserve has too cozy a relationship with many banks it oversees.
Gross and Bansal were former colleagues at the New York Fed. Bansal later joined Goldman Sachs in July 2014.
While at Goldman, Bansal obtained confidential information including 35 documents on 20 occasions from Gross, according to New York banking regulators.
Those documents included some pertaining to examinations of a bank that Goldman was advising about a potential transaction, regulators said.
Bansal on several occasions shared the information with senior Goldman personnel, at times writing in emails that the documents were highly confidential and directing the recipients, “Please don’t distribute,” the regulators said.
Goldman has said that after discovering Bansal obtained the confidential supervisory information, it notified regulators and fired him and a more senior employee who failed to escalate the issue, according to the bank. The New York Fed also fired Gross.
As part of its $50 million settlement announced on Oct. 28, Goldman admitted to failing to supervise for banking law violations.
The bank also agreed to a three-year ban on accepting new consulting work that requires regulators to authorize disclosing confidential information.
Goldman additionally agreed to implement reforms to help ensure it complies with revolving-door restrictions and prevents the improper use of confidential regulatory information. (Editing by Matthew Lewis)