Goldman Sachs agreed to pay $3bn over 1MDB corruption scandal

Goldman Sachs to pay $3bn over 1MDB corruption scandal
In all, the Goldman Sachs is due to pay about $5bn in penalties. Source: GETTY IMAGES
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Daily US Times: Goldman Sachs has agreed to pay nearly $3bn to end a probe of its role in the 1MDB corruption scandal.

The bank’s Malaysian subsidiary also admitted in US court that it had paid more than one billion dollars in bribes to win work raising money for the Malaysian state-owned wealth fund.

Officials in the US said the record settlement reflected Goldman’s “central” role in a “massive corruption scheme”.

The investment bank admitted it had fallen “short”, calling it an “institutional failure”.

In all, the Goldman Sachs is due to pay about $5bn in penalties, which is mounted about two thirds of its 2019 profits, to regulators around the world, including in the United Kingdom, to resolve cases that have severely damaged the firm’s reputation.

The bank’s board also said it will withhold or recoup $174m in compensation awarded to executives, including former boss Lloyd Blankfein, under whose watch the scandal happened.

In a statement, Goldman Sachs said: “The board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm.”

The 1MDB scheme was a global web of corruption and fraud, in which billions of dollars ostensibly raised for public development projects in Malaysia instead landed in private pockets, including those of the country’s former prime minister Najib Razak.

Authorities in Asia, Europe and the US have spent years tracking down assets and cash paid for with money stolen from the Malaysian fund, including property, jewellery and art.

US Department of Justice officials said in announcing the settlement on Thursday that Goldman Sachs had enabled a scheme that caused “significant harm”.

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