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Goldman Sachs Faces Criminal Charges Following 1MDB Scandal

It is the first time that Goldman Sachs has been directly alleged by prosecutors for its claimed role in a scandal, 1MDB scandal in Malaysia. Recently, Malaysian authorities have filed criminal charges against Goldman Sachs International and two of its Asian subsidiaries with former Goldman Partner Tim Leissner for their involvement in the scandal and for omitting material information and publishing untrue statements, which are offenses under Malaysia’s securities laws.

The Malaysian attorney general, Tommy Thomas’s office, demands fines worth more than $3bn from Goldman subsidiaries and its former bankers.

The Allegation

The criminal charge on one of the most influential multinational financial firm proves the increased scrutiny over investment banks. The Malaysian attorney general reveals in a statement that the two bankers are accused of bribing Malaysian officials to secure involvement in the auction of $6.5bn of bonds for 1MDB. Also, Goldman got $600m in fees for its role. It states that Goldman Sachs is accused of helping “dishonestly misappropriate” $2.7bn from bonds issued by 1MDB in 2012 and 2013.

Goldman Sachs Response

On this, Goldman responded stating, “We believe these charges are misdirected, will vigorously defend them and look forward to the opportunity to present our case. The firm continues to cooperate with all authorities investigating these matters.” The firm also said, “Certain members of the former Malaysian government and 1MDB lied to Goldman Sachs, outside counsel and others about the use of proceeds from these transactions.”

On Monday, at early afternoon Goldman Sachs stocks were down 2.3 percent.

With that, Malaysia has also filed charges against Low Taek Jho, the fugitive Malaysian businessman, who is known as Jho Low.

Notably, The recent Malaysian charges look similar to the allegations filed by US prosecutors against Mr. Ng and Mr. Leissner for their involvement in the bond offerings. Hare, Leissner on his part has already pleaded guilty.

Remarkably, The Goldman Sachs Group, Inc., is an American multinational investment firm having its headquarter in New York City. Remarkably, it is the fifth largest bank in the US.

Ruti Vora

Ruti regularly contributes in-depth news articles for leading cryptocurrencies. She contributes technical chart-based price updates and analysis pieces on world's leading digital currencies. She holds graduate degree in journalism.
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