Rohit Bansal, a former Goldman Sachs banker, is expected to plead guilty to a single count information charging him with theft of government property, a misdemeanor, in violation of 18 U.S.C. § 641. According to the information, Bansal was employed by the Federal Reserve Bank of New York ("FRBNY") where he was responsible for supervising certain banks in New York. He then left the FRBNY to work for Goldman Sachs where he "provided advice on regulatory issues to certain client banks, including banks supervised by the FRBNY.
The information alleges that Bansal directed a former colleague of Bansal's at the FRBNY, Jason Gross (named in the information as "Individual-2"), to provide him with "confidential supervisory information," which was the property of the FRBNY. Bansal, according to the information, then "disseminated certain of the [confidential supervisory information] to other [Goldman Sachs] employees for the purpose of assisting with [Goldman Sachs'] work for its client banks."
There are a number of interesting aspects to the prosecution against Bansal. First, the mere fact that he is facing these federal charges is itself an uncommon occurrence; after the financial crisis of 2007, it was very rare for someone working in the banking sector to be indicted. Second, this prosecution by information preludes a likely storm of penalties and charges Goldman Sachs will be facing for its role in the leak of the confidential FRBNY documents. In fact, Goldman reportedly faces $50 million in regulatory penalties at the moment.
From a criminal defense perspective, however, perhaps the most interesting aspect of the criminal allegations was how it is being done; pursuant to an "information" as opposed to an "indictment." As with an indictment, an information is essentially a charging document which defines what a defendant is being charged with, and sets forth the basic outline of the allegations against him or her. An information, however, can only be used for misdemeanor (i.e. non-felony) cases, or if the defendant expressly waives an indictment; they can simply be filed with the appropriate Court by the U.S. Attorney's Office. An indictment, on the other hand, must be used in all felony cases (unless so waived by the defendant) and is only obtained when a Grand Jury has found probable cause to believe a crime has been committed. That Bansal is being charged via an information strongly suggests he (and his criminal defense attorney) has been negotiating with the government for some time and that a plea agreement has been struck. Importantly, because Bansal is pleading to an information alleging misdemeanor theft of government property, he is only facing a maximum 1 year prison sentence. The manner in which Bansal is being prosecuted might even suggest he has agreed with the government to testify against Goldman Sachs and other upper-level management, in exchange for only being charged with a misdemeanor.
Recently, a Goldman Sachs spokesperson stated that Bansal only worked for the company for three months and when it found out about the leak, it began an investigation and notified the appropriate authorities. Along with the $50 million in penalties, Goldman Sachs could face new restrictions on how it handled the regulatory information. According to the NY Times, "the settlement with the Department of Financial Services would also force Goldman to take the rare step of acknowledging that it failed to adequately supervise the former banker-thrusting the bank back into the spotlight just as it was beginning to overcome a popular image as a firm willing to cut corners to turn a profit."
Brad Bailey is a Boston federal crimes lawyer with nearly 35 years of experience in the field. He began his career as a state and federal prosecutor and made the natural transition to defense lawyer, where he defends all manner of federal crimes, including white collar crimes. As a result of his unique background, he understands both sides of the law and uses this knowledge to help anyone involved in regulatory or banking crimes cases. Please contact Boston white collar crime lawyer Brad Bailey today for a free and confidential phone consultation.