Goldman Sachs helped raise $ 6.5 billion for Malaysian government sovereign wealth fund
New York:
Global financial titan Goldman Sachs has agreed to pay $ 2.9 billion in penalties to settle criminal charges in Malaysia’s 1MDB corruption scandal, the largest US fine on record in a bribery case, the report said on Thursday. Ministry of Justice.
US Acting Assistant Attorney General Brian C. Rabbitt said Goldman had “accepted responsibility” in the case involving $ 1.6 billion in bribes, the largest on record. , and massive laundered gains through the US financial system.
Goldman Sachs helped raise $ 6.5 billion for the Malaysian government’s sovereign wealth fund. The US Department of Justice said more than $ 4.5 billion was stolen from 1MDB by high-level fund officials and their associates between 2009 and 2015.
The investment fund “was plundered by corrupt officials and their co-conspirators, including Goldman bankers” turning it “into a piggy bank for corrupt officials and their cronies,” Rabbitt said at a press briefing .
In a first for Goldman Sachs, the company’s Malaysian unit pleaded guilty Thursday in a U.S. court to violations of U.S. corruption law as part of a deal to end the criminal investigation into the large-scale case involving the authorities of nine countries.
The guilty plea could curtail Goldman Sachs Malaysia’s business but allow the parent company to avoid admitting wrongdoing in court – which would have hampered its ability to do business.
“Significant consequences”
The parent company has pleaded not guilty in a US court and agreed to “postpone prosecution” for three and a half years, during which time the company will face increased scrutiny from regulators.
But Rabbitt stressed that despite the deal, the company was indicted in the corruption scandal, “therefore there has been significant criminal liability” for Goldman and “imposes significant consequences” in these cases.
The Justice Department has charged three people in the case, including two former Goldman executives. Tim Leissner, the former president of Southeast Asia, has pleaded guilty, while Ng Chong Hwa, also known as “Roger Ng”, former director of the investment bank of GS Malaysia, awaits his trial, and Low Taek Jho remains a fugitive.
“Goldman today admitted that in order to implement the scheme, Leissner, Ng, Employee 1 and others conspired with Low Taek Jho” to pay the bribes and ignored the signals of alarm, indicates the press release.
In another astonishing turn, the company said it would demand reimbursement of $ 174 million in salary and bonuses paid to current and former executives, including chief executive David Solomon and his predecessor Lloyd Blankfein.
These so-called clawbacks are virtually unknown in corporate affairs.
Solomon said in a statement “that it is quite clear that some former employees have broken the law, lied to our colleagues and circumvented company controls,” adding: “We acknowledge that we have not responded to adequately to alarm signals “.
Included in the total penalty amount, Goldman will pay the SEC a $ 400 fine, refund $ 600 million in profits, and pay a $ 154 million fine to the Federal Reserve, which will also require the company to improve its performance. risk management and its internal oversight.
The Malaysian government dropped the lawsuits against Goldman in July after reaching a $ 3.9 billion settlement with the financial giant.
The firm, which posted profits of 3.5 billion dollars in the last quarter, had set aside more than 3.1 billion dollars as of September 30 “for litigation and regulatory proceedings”.
Goldman stock closed US trading 1.2% higher after settling the uncertainty.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
