Ex-N.Y. Fed employee pleads guilty over Goldman leaks

NEW YORK (Reuters) - An ex-employee of the Federal Reserve Bank of New York pleaded guilty on Wednesday to the theft of confidential information that he admitted to leaking to a former colleague working at Goldman Sachs Group Inc.

Jason Gross, 37, entered the plea to a misdemeanor charge of theft of government property, days after Goldman Sachs reached a related $50 million settlement with the New York Department of Financial Services.

In court, Gross admitted to providing confidential information to Rohit Bansal, his former supervisor at the Federal Reserve Bank of New York who had left to work at Goldman Sachs.

A court official said that a separate plea hearing is scheduled for Thursday for Bansal, who prosecutors said used documents supplied by Gross to assist Goldman’s work in advising bank clients. His lawyer declined comment.

Under federal sentencing guidelines, Gross faces up to one year in prison and a fine of up to $30,000, according to the plea agreement filed in court. He will be sentenced on March 2.

“We look forward to putting this matter behind us,” Bruce Barket, Gross’ lawyer, said after the hearing.

The case highlighted the so-called revolving door on Wall Street, in which regulators take new jobs at the banks they formerly oversaw.

According to prosecutors and New York regulators, after joining Goldman Sachs in July 2014, Bansal on several occasions obtained several documents from Gross.

Those documents included some pertaining to examinations of a bank that Goldman was advising about a potential transaction, regulators said.

Bansal shared some of the documents with others at Goldman, regulators and prosecutors said, telling them in at least one instance, “Please don’t distribute.”

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.

The case is U.S. v. Gross, U.S. District Court, Southern District of New York, No. 15-cr-766.