Court: Goldman Sachs violated US anti-bribery laws

(22 Oct 2020) FOR CLEAN VERSION SEE STORY NUMBER: 4293943

A subsidiary of Goldman Sachs pleaded guilty on Thursday and agreed to pay more than $2.9 billion in a foreign corruption probe tied to the Malaysian 1MDB sovereign wealth fund, which was looted of billions of dollars in a corruption scandal.
In addition, several current and former top executives at Goldman will have to return millions of dollars in pay and bonuses to the company, a financial penalty for those in charge when the scandal unfolded.
Goldman Sachs Malaysia entered the plea in federal court in Brooklyn. As part of its plea, the company admitted that it "knowingly and willfully" conspired to violate U.S. anti-bribery laws.
The $2.9 billion includes payments to U.S. and overseas regulators. The penalties also include roughly $600 million in profits Goldman made off the 1MDB scandal that it will have to disgorge. Goldman had previously reached a $3.9 billion settlement with the government of Malaysia.
Goldman Sachs' board of directors decided to claw back pay and bonuses from top executives, including current CEO David Solomon and former CEO Lloyd Blankfein.
The firm is in talks with additional executives to return part of their pay to the company over their role in the scheme. In total, more than $174 million in pay and bonuses are being returned to the company, the board said.
Malaysian and U.S. prosecutors had alleged that bond sales organized by Goldman Sachs provided one of the means for associates of former Prime Minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia's economic development.
The fund, 1Malaysia Development Berhad, was set up in 2009 by Najib to promote economic development. It relied primarily on debt to fund investment and economic development projects and was overseen by senior Malaysian government officials, according to court records.
Najib set up 1MDB when he took office in 2009, but it accumulated billions in debts, and U.S. investigators allege at least $4.5 billion was stolen from the fund and laundered by his associates.
Public anger over the corruption allegations contributed to the shocking election defeat of Najib's long-ruling coalition in May 2018.
Two Goldman Sachs executives have also been personally charged for fraud. Tim Leissner, who was the chairman of Goldman's Southeast Asia division, pleaded guilty to money laundering and violating the Foreign Corrupt Practices Act.
Another Goldman executive, Ng Chong Hwa also known as "Roger Ng," will stand trial for money laundering and violating the FCPA in March 2021.

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