Goldman Sachs has reportedly agreed to settle with the U.S. government over its role in a corrupt Malaysian government investment fund, which is one of the firm’s worst scandals since the financial crisis. In addition, Goldman Sachs previously agreed to pay the Malaysian government billions of dollars to end a criminal probe.
Goldman Sachs’ Billions of Dollars in Settlement
Goldman Sachs Group Inc. has agreed to pay about $2.8 billion to the U.S. Department of Justice (DOJ) to settle a case involving a corrupt Malaysian government investment fund, the Wall Street Journal reported Tuesday. This is in addition to the $3.9 billion settlement the firm agreed to pay the Malaysian government over the same case.
Under the agreement with the DOJ, Goldman Sachs will admit fault but will not face prosecution, the publication noted, citing people familiar with the matter. The firm’s Asian subsidiary tied to the misconduct is expected to plead guilty this week. The deal will allow Goldman Sachs to avoid a guilty plea that could cripple its ability to do business.
The case involves 1Malaysia Development Berhad (also known as 1MDB) which was set up in 2009 by former Malaysian Prime Minister Najib Razak to promote the country’s economic development. The state-owned fund has been under heavy scrutiny for its suspicious financial transactions, money laundering, fraud, and theft. Razak was found guilty of the scandal in July and sentenced to 12 years in prison and fined $49 million. He additionally received 10 years of jail on six charges, including money laundering.
Goldman Sachs helped sell $6.5 billion in bonds for the fund in 2012 and 2013, earning higher fees than is typical for this kind of work, the publication detailed. The media calls the scheme one of Goldman Sachs’ worst scandals since
