The so-called revolving door between financial regulators and the private sector has finally swung around and bitten one of those private companies right where it hurts – their bottom line.

The New York Department of Financial Services announced this week that Goldman Sachs (GS) will pay $50 million in fines and be subject to several regulatory restrictions after a NYDFS investigation found that a former Goldman Sachs employee improperly shared confidential regulatory and government information obtained from the Federal Reserve Bank of New York.

The now-former Goldman employee in question, Rohit Bansal, was able to obtain confidential information from the New York Fed because he was an employee of the New York Fed before going to work at Goldman Sachs.

According to the NYDFS, Bansal began working at Goldman Sachs in July 2014, as associate in the financial institutions group of the investment banking division.

Before joining Goldman, Bansal worked at the New York Fed for nearly seven years as a bank examiner. His last position at the Fed was as the “central point of contact” for an unnamed financial institution. As the central point of contact, Bansal was the financial institutions’ primary supervisory contact at the Fed.

According to the NYDFS, Bansal was required to resign from his position at the New York Fed for, among other reasons, taking his work Blackberry overseas without obtaining prior authorization to do so and for attempting to falsify records to make it look like he had obtained such authorization, and for engaging in unauthorized communications with the Federal Reserve Board.

Despite those issues, Bansal was hired by Goldman Sachs, “in large part for the regulatory experience and knowledge he had gained while working at the New York Fed,” the NYDFS said.

And despite being prohibited by the Fed from working with any financial institution he had supervisory authority over while at the Fed, Goldman Sachs placed Bansal in charge of working for a Goldman client that he was in charge of examining mere months earlier as a regulator.

While working at Goldman, Bansal then wrongfully obtained confidential information, including approximately 35 documents, on approximately 20 occasions, from a former co-worker at the New York Fed, the NYDFS said.

These documents included confidential regulatory or supervisory information, many of which marked as “internal,” “restricted,” or “confidential”, and belonged to the NYDFS, the New York Fed or the Federal Deposit Insurance Corporation.

According to the NYDFS, Bansal’s conduit for receiving information from the New York Fed was his former coworker, Jason Gross, who has since been terminated for this conduct. 

While still employed at the New York Fed, Gross would email documents to the Bansal’s personal email address, and the Bansal would then forward those emails to his own Goldman work email address.

On numerous occasions, the Bansal provided this confidential information to various senior personnel at Goldman, including the his supervisors, a partner and a managing director, as well as a vice president and another associate who perform quantitative analysis for Goldman.

Goldman Sachs fired Bansal late last year after his malfeasance was discovered.

Despite Bansal being let go, Goldman will stay $50 million in fines for his actions.

Additionally, Goldman has accepted a three-year voluntary abstention from accepting new consulting engagements that require the NYDFS to authorize the disclosure of confidential information under New York banking laws, the NYDFS said.

According to the NYDFS, Goldman Sachs also admits that a Goldman employee engaged in the criminal theft of NYDFS confidential supervisory information.

Goldman Sachs also admitted that its management failed to effectively supervise its employee to prevent this theft from occurring; and Goldman also admitted that it failed to implement and maintain adequate policies and procedures relating to post-employment restrictions for former government employees.

Additionally, Goldman will implement a series of reforms to help ensure compliance with post-government-employment revolving door restrictions and prevent the improper use of confidential regulatory information under New York banking law.

“We are pleased that Goldman Sachs has decided to resolve this matter and work with us to institute reforms that help prevent similar problems from occurring in the future,” NYDFS Acting Superintendent Anthony Albanese said. “This case underscores the critical need for financial institutions to put in place strong controls and policies for employee conflicts screening and the use of confidential regulatory information.”