Financial news

U.S. Justice staff seek Goldman guilty plea in 1MDB settlement – Financial Times

By  | 

Via Yahoo Finance

(Reuters) – A U.S. government settlement with Goldman Sachs Group Inc over its role in the 1MDB corruption scandal should include a guilty plea at the parent company level, U.S. Department of Justice staff have recommended, according to a Financial Times report on Wednesday.

The U.S. Justice Department announced criminal charges against two former Goldman bankers tied to the scandal, Tim Leissner and Roger Ng, last year. Goldman is being investigated by Malaysian authorities and the U.S. Department of Justice for its role. The bank has consistently tried to distance itself from the scandal, saying the criminal activities of Leissner and Ng were hidden from the bank’s management.

Goldman Sachs spokesman Jake Siewert said in statement on Wednesday: “We do not believe that such a charge would be warranted by the facts of the case or the law, particularly because senior management was unaware of the criminal activity by Mr. Leissner and his associate who took extraordinary efforts to hide their part in the illegal scheme from management, compliance, and legal functions at the firm.”

The staff recommendation by prosecutors is now being considered by senior officials at the Justice Department, the FT said https://on.ft.com/2PrEMdI, citing people familiar with the matter. The U.S. Justice Department did not immediately respond to a request for comment.

Goldman’s shares fell 2 percent following the report.

According to prosecutors, the investment bank generated about $600 million in fees for its work with 1MDB, which included three bond offerings in 2012 and 2013 that raised $6.5 billion. Leissner, Ng and others received large bonuses in connection with that revenue.

READ ALSO  Needed: Benchmarks for net international investment positions

Prosecutors described the bank’s system of internal accounting controls as “easily circumvented” and said its culture in Southeast Asia was “highly focussed on consummating deals, at times prioritising this goal ahead of the proper operation of its compliance functions.”

The government of former Malaysian Prime Minister Najib Razak set up the 1MDB fund in 2009, and the U.S. Justice Department estimated $4.5 billion (3.5 billion pounds) was misappropriated by high-level fund officials and their associates between 2009 and 2014.

(Reporting By Aparajita Saxena in Bengaluru; Editing by Arun Koyyur, Bernadette Baum and Cynthia Osterman)


Print Friendly, PDF & Email

Hold dit netværk orienteret