Goldman Sachs to pay $3bn over 1MDB corruption scandal

Goldman Sachs to pay $3bn over 1MDB corruption scandal

10/22/2020 9:37:00 PM

Goldman Sachs to pay $3bn over 1MDB corruption scandal

The investment bank will pay a record sum for violating bribery laws in the 1MDB corruption affair.

image copyrightEPAimage captionNajib Razak (centre) was prime minister from 2009 to 2018. Corruption allegations played a role in his election defeatIn announcing the settlement on Thursday, US Department of Justice officials said Goldman Sachs had enabled a scheme that caused "significant harm".

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"That harm was borne principally and in the first instance by the people of Malaysia, who saw a fund created to benefit them... instead turned into a piggybank for corrupt public officials and their cronies," said Brian Rabbitt, acting assistant attorney general of the Justice Department's criminal division.

In July, Najib was found guilty in Malaysia on all seven counts in the first of several multi-million dollar corruption trials and sentenced to 12 years in jail.He had pleaded not guilty to the charges of criminal breach of trust, money laundering and abuse of power and is appealing the decision.

What was Goldman's role?Probes of Goldman Sachs focused on its help raising $6.5bn in 2012 and 2013 for the fund formally known as 1Malaysia Development Bhd (1MDB), work authorities said earned the firm more than $600m.Goldman had long blamed rogue employees, asserting it had no idea the money it helped raise would be diverted from planned development projects within Malaysia.

But on Thursday, the bank admitted that its Malaysian unit had "knowingly and willingly" paid bribes to foreign officials and that it had ignored red flags that should have alerted higher-ups to problems with the deal.image copyrightimage caption

Goldman boss David Solomon said the bank "fell short" in its oversightIt agreed to return the $600m to Malaysia and pay roughly $2.3bn to regulators in the US, UK, Hong Kong and Singapore.The settlement with the US charged the parent company with bribery violations, but authorities agreed to defer prosecution. That move allows Goldman to avoid a criminal conviction, a black mark that would have forced some clients to end work with the fund.

Earlier, one former Goldman Sachs partner, Tim Leissner, pleaded guilty in the US to conspiring to launder money and violating foreign bribery laws. Another executive is awaiting trial on foreign bribery offenses."We have to acknowledge where our firm fell short," chief executive David Solomon said. "While many good people worked on these transactions and tried to do the right thing, we recognise that we did not adequately address red flags and scrutinise the representations of certain members of the deal team... as effectively as we should have."

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What other settlements have been announced?Three months ago, Goldman Sachs reached a $3.9bn settlement with the Malaysian government for its role in the corruption scandal.The settlement included a $2.5bn cash payout by Goldman, while the investment bank said it would guarantee that the government would receive at least $1.4bn from money recovered from the scheme.

The deal resolved charges in Malaysia that Goldman had misled investors.Hong Kong regulators on Thursday said they were due to receive $350m in fines. Goldman has also agreed to pay $126m in penalties in the UK and $122m in penalties in Singapore. Read more: BBC News (UK) »

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Banks hey... who'd have thought it... Who else is guilty and due fines? Must be others... Funny how all these guys slag crypto off for being dodgy Not defending GS, what they did was disgusting but is it fair that only 600M will go to Malaysia va billions to Western authorities? Malaysian people this will be be defrauded twice

We all trust the wholly trustworthy financial services sector. Totally. 🤮🤮🤮 Chump change for them. What? WOW lesser humans would not just be paying fine. They will be doing jail terms... there is something fundamentally wrong with this world..... Purdue Pharma to pay $8 billion no jail Goldman Sachs to pay $3 billion no jail ...see a pattern? Expect a lot of GOP politicians getting large $ donations very soon. Also ...follow that money as the fines come into government hands...🤔

Is anyone going to fecking jail? Every liberal is a Nazi

Goldman Sachs reaches $2.9bn deal to settle US-led 1MDB inquiryBank’s Malaysia division agrees to plead guilty to violating foreign bribery laws

Goldman Sachs reaches $2.9bn deal to settle US-led 1MDB inquiryBank’s Malaysia division agrees to plead guilty to violating foreign bribery laws

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