Goldman Sachs Fined For Employee’s Relationship With Fed

Goldman Sachs will be fined $50 million for one of its employees’ relationship with the Federal Reserve Bank of New York. It’s a small fine, but Goldman didn’t contest the fine.

The scenario is common: A Federal Reserve employee leaves the public sector of the private sector or vice versa. Goldman Sachs will not only pay a fine to the New York Department of Financial Services, but also the firm will not be able to accept certain types of consulting work for three years. As Reuters writes in breakingviews:

It also shows how the revolving door between government and business sometimes spins into danger. Financial-industry experience can be invaluable for policymaking and regulation, while insight into Uncle Sam’s ways is an asset on Wall Street. And the notion that ex-bankers can’t be tough watchdogs is nonsense, as Goldman alumnus and former Commodity Futures Trading Commission Chairman Gary Gensler proved.

Read More: Goldman Sachs Outlook On Gold No Bueno

Professionals who move from jobs as overseers to the private sector bear watching, though. There are already clear Securities and Exchange Commission limits on what an ex-employee can do, and they should be standard for all agencies. The Goldman case highlights a need for stricter rules on handling sensitive information – and the responsibility of employers to ensure they’re followed. The path between Washington and Wall Street deserves to stay open so long as it is clearly lit.

Justin O’Connell owns and operates GoldSilverBitcoin and writes for the San Diego Reader.