Goldman Sachs Settles with Regulators for More Than 2.9 Billion
Goldman Sachs is paying more than $2.9 billion in a settlement to regulators for violating US anti-corruption law, according to CNBC.
The deal allowed Goldman to avoid a guilty plea in the United States. $600 million is going to the Malaysian government to settle an issue with fee disgorgement. Regulators in the US, UK, Singapore, and others are receiving pieces of the sum as well. Goldman entered into a deferred prosecution agreement with the Department of Justice, allowing the bank to continue operating in certain business environments.
“Goldman Sachs today accepted responsibility for its role in a conspiracy to bribe high-ranking foreign officials to obtain lucrative underwriting and other business relating to 1MDB,” acting Assistant Attorney General Brian C. Rabbitt said. The announcement “requires Goldman Sachs to admit wrongdoing and pay nearly three billion dollars in penalties, fines, and disgorgement, holds the bank accountable for this criminal scheme.”
Goldman was accused of aiding a corrupt Malaysian finance official that stole billions of dollars from the $6.5 billion 1MDB fund, which was organized to help promote growth in the Malaysian economy. Part of the 1MDB funds was used to purchase a $250 million dollar yacht, a stake in the film "The Wolf of Wall Street" and property around the world. An additional $1 billion of funds were used to bribe Malaysian and Abu Dhabi officials.
Goldman was able to charge massive fees to facilitate bond deals that fund 1MDB. The bank raked in $600 million in fees. David Solomon, CEO at Goldman, is having his pay reduced as a result of the scandal. “While many good people worked on these transactions and tried to do the right thing, we recognize that we did not adequately address red flags and scrutinize the representations of certain members of the deal team, most notably Tim Leissner, and the outside parties as effectively as we should have,” Solomon said in a memo to employees.