The FRB today ordered Goldman Sachs to pay a $36.3 million civil money penalty arising from violations of rules regarding confidential supervisory information. The release states that the “Board expects all firms, including Goldman Sachs, to comply with all U.S. laws, rules, and regulations.” (emphasis supplied)
The majority of supervisory information received by banks from their regulators is considered confidential. That is, confidential supervisory information is not only internal materials that regulators don’t share with banks. Each of the FRB, OCC, and FDIC has its own rules on what specifically constitutes “confidential” supervisory information, and under what circumstances banks can share it — even with their attorneys, financial advisers, and potential transaction partners. Under the rules, not only the sender but also the recipient of supervisory information could be in violation if the information is “confidential.”
The FRB’s release may be a reminder to practitioners to take their obligations under the rules regarding confidential supervisory information seriously, lest the regulators do that for them.