Payback time: Goldman Sachs pays more billions in 1MDB scandal

The 1MDB adventure leaves Goldman Sachs with a heavy bill

US investment firm Goldman Sachs admitted its role in the biggest foreign bribery case in US enforcement history involving Malaysia’s sovereign fund 1Malaysia Development Berhad, or 1MDB, saying it will pay another $2.9 billion in penalties related to the case, leaving Goldman with a total bill for the scandal of $5.1 billion.

Goldman officials helped spread $1.6 billion in illicit payments across Malaysia and the Middle East as part of a scheme that diverted money raised for development projects into an international spending spree on mansions and lavish parties, according to Bloomberg.

The bank now agreed to pay billions of dollars in new penalties to the US Justice Department and other US authorities, as well as to regulators in the UK, Hong Kong and Singapore. The payments brought its overall tab to more than $5 billion to resolve probes into bond deals it arranged for 1MDB.

As a result, the Wall Street giant will cut the pay of its CEO David Solomon and other current top executives and claw back compensation from his predecessor Lloyd Blankfein and several other former executives, the bank said on October 22.

Conspiration to bribe Malaysian officials

The resolutions conclude more than a half decade of investigations into Goldman’s role in raising $6.5 billion for 1MDB in three bond offerings. To smooth the way for those bond deals, Goldman officials conspired with a 1MDB official to bribe Malaysian officials and officials of a sovereign wealth vehicle in Abu Dhabi, the US Justice Department said.

US authorities said that Goldman’s misconduct rose to the bank’s highest ranks, despite its insistence for years that rogue employees were responsible.

“The scheme was principally carried out by senior officials in Goldman,” acting US attorney Seth DuCharme told Bloomberg.

In all, some $2.7 billion of the money raised for 1MDB was stolen by people connected to the country’s former prime minister Najib Razak and diverted for bribes, a luxury yacht, mansions and upscale apartments, fine art and even funding for the Hollywood movie “The Wolf of Wall Street.”



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The 1MDB adventure leaves Goldman Sachs with a heavy bill US investment firm Goldman Sachs admitted its role in the biggest foreign bribery case in US enforcement history involving Malaysia’s sovereign fund 1Malaysia Development Berhad, or 1MDB, saying it will pay another $2.9 billion in penalties related to the case, leaving Goldman with a total bill for the scandal of $5.1 billion. Goldman officials helped spread $1.6 billion in illicit payments across Malaysia and the Middle East as part of a scheme that diverted money raised for development projects into an international spending spree on mansions and lavish parties, according to Bloomberg....

The 1MDB adventure leaves Goldman Sachs with a heavy bill

US investment firm Goldman Sachs admitted its role in the biggest foreign bribery case in US enforcement history involving Malaysia’s sovereign fund 1Malaysia Development Berhad, or 1MDB, saying it will pay another $2.9 billion in penalties related to the case, leaving Goldman with a total bill for the scandal of $5.1 billion.

Goldman officials helped spread $1.6 billion in illicit payments across Malaysia and the Middle East as part of a scheme that diverted money raised for development projects into an international spending spree on mansions and lavish parties, according to Bloomberg.

The bank now agreed to pay billions of dollars in new penalties to the US Justice Department and other US authorities, as well as to regulators in the UK, Hong Kong and Singapore. The payments brought its overall tab to more than $5 billion to resolve probes into bond deals it arranged for 1MDB.

As a result, the Wall Street giant will cut the pay of its CEO David Solomon and other current top executives and claw back compensation from his predecessor Lloyd Blankfein and several other former executives, the bank said on October 22.

Conspiration to bribe Malaysian officials

The resolutions conclude more than a half decade of investigations into Goldman’s role in raising $6.5 billion for 1MDB in three bond offerings. To smooth the way for those bond deals, Goldman officials conspired with a 1MDB official to bribe Malaysian officials and officials of a sovereign wealth vehicle in Abu Dhabi, the US Justice Department said.

US authorities said that Goldman’s misconduct rose to the bank’s highest ranks, despite its insistence for years that rogue employees were responsible.

“The scheme was principally carried out by senior officials in Goldman,” acting US attorney Seth DuCharme told Bloomberg.

In all, some $2.7 billion of the money raised for 1MDB was stolen by people connected to the country’s former prime minister Najib Razak and diverted for bribes, a luxury yacht, mansions and upscale apartments, fine art and even funding for the Hollywood movie “The Wolf of Wall Street.”



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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