In a negotiated settlement, the Board of Governors of the Federal Reserve System ("FRB") ordered a firm to: (i) pay a $36.3 million civil money penalty for its unauthorized use and disclosure of confidential supervisory information; and (ii) implement a comprehensive program to ensure the proper use of such information.
The FRB determined that:
- firm personnel used confidential supervisory information from the FRB and the New York State Department of Financial Services improperly in presentations to its clients and prospective clients in an effort to solicit business; and
- the firm failed to implement and maintain sufficient policies, procedures and employee training to ensure compliance with current laws that prohibit the unauthorized use or disclosure of confidential supervisory information.
The firm also agreed to provide substantial assistance to the FRB in connection with its investigation into whether separate enforcement actions should be brought against specific individuals.
In addition, the FRB instituted enforcement proceedings against a former managing director at the firm in an effort to bar him from the banking industry permanently. The FRB prohibited the firm from reemploying or retaining individuals who were involved in the improper disclosures.
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