1MDB scandal: Former Goldman Sachs chief coy on returning US$10mil

ONE of Goldman Sachs’ former top executive have yet to return US$10 mil pocketed out of the 1MDB corruption scandal.

According to financial newswire Bloomberg, the bank has committed to reclaim US$67 mil from five of its former top executives but its former president, Gary Cohn has yet to return his share.

According to sources, Goldman Sachs had failed to persuade Cohn to return the US$10 mil and making things worse, there is little the bank can do if he refuses or returns it at a discounted rate.

So far, Cohn had declined to comment on whether he intends to return the amount in full, saying only in an interview that he is “having very constructive conversations with Goldman Sachs on that”.

A representative for Goldman Sachs Group Inc declined to comment on the matter.

The former Goldman Sachs’ president’s refusal to return the sum has become a stumbling block to the bank’s effort to clear its reputation after being implicated of plundering 1MDB.

The bank opted to attach accountability to its senior executives, even though they had not been directly implicated by the US Justice Department’s findings.

The bank’s board called the move as a way to repair its “institutional failure”.

In October, Goldman Sachs announced plans to keep or recoup US$67 mil it had awarded to former executives and deduct another US$31 mil from chief executive officer (CEO) David Solomon and his three top deputies’ pay this year.

The move came after it admitted to its role in the biggest foreign bribery case in US enforcement history and agreed to pay about US$5 bil in penalties to free itself from multiple probes across continents.

Cohn, who was president for more than a decade, was one of two leaders the bank had to ask to return the money.

David Viniar, its former chief financial officer and current board member, has already surrendered his payment, sources confirmed.

The remaining executives, including former chief executive officer Lloyd Blankfein, were docked from payments still owed to them.

“It goes with the responsibility of leadership to accept some consequences for things that go wrong on your watch,” Blankfein remarked.

Cohn had been one of the top paid executives after a lucrative Wall Street career. When he joined President Donald Trump’s team in 2017 as director of the National Economic Council, the 60-year-old was able to immediately collect about US$65 mil in cash and stock tied to future Goldman performance, another US$220 mil of Goldman equity and stakes in company-run investment funds. – Dec 3, 2020.

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