GOLDMAN Sachs on Thursday agreed to pay nearly US$3 bil to settle a probe into its role in Malaysia’s 1MDB corruption scandal, and its Malaysia unit pleaded guilty to violating foreign bribery laws, drawing a line under a saga that has dogged the bank for years.
The settlement resolves a probe by U.S. authorities into the bank’s role in underwriting three bond offerings in 2012 and 2013 that raised US$6.5 bil for Malaysia’s government.
Under the terms, Goldman has been slapped with a US$2.3 bil penalty and about US$600 mil in disgorgement of ill-gotten gains.
The U.S. Department of Justice said the deal was the largest penalty ever levied on a U.S. company for breaching the Foreign Corrupt Practices Act and involved an unprecedented number of regulators across the globe.
Justice Department acting head of the criminal division Brian Rabbitt said the settlement reflected the bank’s central role “in a massive global scheme to loot billions of dollars” from the state Malaysian fund.
Between roughly 2009 and 2014, Goldman paid more than US$1.6 bil in bribes to foreign officials in Malaysia and Abu Dhabi to win 1MDB business, prosecutors said.
While the saga has proved a humbling and reputationally damaging episode for Wall Street’s powerhouse investment bank, the settlement will allow CEO David Solomon to accelerate his plan to reshape Goldman as a more conventional bank, analysts said.
The move follows a US$3.9 bil settlement the bank reached with Malaysia in July to settle all charges against the bank there related to the matter. – Oct 23, 2020
