Goldman Sachs worker likely to face jail amid rare criminal charges for a banker

[Eugene]

Source: The Guardian

Goldman Sachs worker likely to face jail amid rare criminal charges for a banker

Rupert Neate in New York
Monday 26 October 2015 17.13 GMT

A Goldman Sachs banker is expected to be jailed over the leaking of confidential information from the Federal Reserve Bank of New York, the investment banker’s former employer.

Federal prosecutors are preparing to this week announce criminal charges against the banker, Rohit Bansal, and an employee of the regulator, according to the New York Times.

Lawyers for the men, who were both fired in the wake of the leak, are said to be hammering out a deal with prosecutors. Even if they agree on the plea deal, they are likely to face up to a year in jail.

It is rare for criminal charges to be brought directly against bankers in the US, but the attorney general, Loretta Lynch, has set out new guidelines designed to ensure that more executives, bankers and other businesspeople are held personally accountable for their actions.

Under the planned deal, Goldman would not face criminal charges but would pay a fine of as much as $50m and would be forced to admit that it failed to properly supervise Bansal.

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Read more: http://www.theguardian.com/us-news/2015/oct/26/federal-reserve-new-york-leak-goldman-sachs-criminal-charges-rohit-bansal

[99th_Monkey]

1. Goldman Sachs, Hillary's biggest Wall St. backer.

[think]

2. This does nothing to make up for GS's unscrupulous past and does nothing to close the loopholes they

currently are exploiting to offshore derivatives.

While the bank did the right thing in this instance I expect no change in their basic behavior that regulations were meant to be exploited as they have done so consistently throughout their existence. In many cases this allowed them to lie to and cheat their clients like they have done fairly recently during the financial meltdown.

Vanishing Act
U.S. banks moved billions of dollars in trades beyond Washington’s reach

By Charles Levinson - Filed Aug. 21, 2015, 2 p.m. GMT

Part 2: The story of how Wall Street’s giants got around derivatives rules imposed by the CFTC after the financial crisis. The fix: tweaking contracts and shifting deals offshore.

NEW YORK – This spring, traders and analysts working deep in the global swaps markets began picking up peculiar readings: Hundreds of billions of dollars of trades by U.S. banks had seemingly vanished.

“We saw strange things in the data,” said Chris Barnes, a former swaps trader now with ClarusFT, a London-based data firm.

The vanishing of the trades was little noted outside a circle of specialists. But the implications were big. The missing transactions reflected an effort by some of the largest U.S. banks — including Goldman Sachs, JP Morgan Chase, Citigroup, Bank of America, and Morgan Stanley — to get around new regulations on derivatives enacted in the wake of the financial crisis, say current and former financial regulators.

The trades hadn’t really disappeared. Instead, the major banks had tweaked a few key words in swaps contracts and shifted some other trades to affiliates in London, where regulations are far more lenient. Those affiliates remain largely outside the jurisdiction of U.S. regulators, thanks to a loophole in swaps rules that banks successfully won from the Commodity Futures Trading Commission in 2013.

The products affected by that loophole include some of the most widely traded financial derivatives in the world – such as interest rate swaps, where a bank takes a fee for exchanging a variable-rate interest payment for a fixed rate with a client, and credit default swaps, a sort of insurance where one party, often a bank, agrees to pay another party in the event of a bond default.

Full story:
http://www.reuters.com/investigates/special-report/usa-swaps/