Goldman Sachs will pay nearly $ 3 billion in financial penalties to close the American part of the vast corruption scandal of the sovereign wealth fund 1MDB involving its Malaysian subsidiary, which has exceptionally pleaded guilty.
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In addition to its reputation, the slate is heavy for the prestigious American investment bank in this politico-financial affair with planetary ramifications: it thus pays, for the moment, nearly 6 billion dollars in total to various authorities around the world. to settle the investigations.
Rare fact: The Malaysian branch of the establishment admitted its guilt Thursday before a New York judge for violating the American law on corrupt practices abroad (FCPA).
This is the first time that a division linked to Goldman Sachs has admitted wrongdoing in any investigation by authorities.
Billions of dollars had been embezzled from 1MDB, a sovereign wealth fund believed to contribute to Malaysia’s economic development.
Goldman Sachs is accused of having participated in it by arranging bond issues totaling $ 6.5 billion in 2012 and 2013. It had collected some $ 600 million for this intermediary role.
Its subsidiary admitted having, between 2009 and 2014, participated in a scheme that led to the payment of more than $ 1.6 billion in bribes to executives in Malaysia and Abu Dhabi to be retained as an advisory bank.
While the penalty imposed on Thursday by US authorities is heavy, it allows the bank, which has admitted ignoring warning signals, to turn the page on the court case and focus on its activities.
Pleading guilty means that the Asian subsidiary of Goldman Sachs will see its scope of activities limited or may no longer be able to exercise some of them.
The parent company will not be sued by the American authorities but is committed to strengthening its internal controls and procedures for three and a half years to avoid a repetition of the facts denounced.
That does not, however, prevent parties who feel aggrieved – investors or individuals – from suing the New York-based firm.
The amount paid by the bank to the United States corresponds to a fine of $ 2.3 billion and the reimbursement of just over $ 600 million in commissions collected by the financial institution.
Part of that money, $ 1.6 billion, will be used to pay fines to authorities in other countries, including the UK and Singapore, as well as other government agencies.
For example, the US stock market policeman is expected to recover $ 400 million and the New York State Financial Services Regulator (DFS) $ 150 million.
Goldman Sachs already paid Malaysia $ 2.5 billion last month as part of an out-of-court settlement that is to settle the investigation in the country. She also guaranteed that at least 1.4 billion funds embezzled from the 1MDB fund would be recovered.
Hong Kong’s financial regulator said Thursday it had fined the merchant bank 2.71 billion Hong Kong dollars ($ 350 million).
On the political side, former Malaysian Prime Minister Najib Razak, whose coalition lost the elections in 2018 largely because of the anger of voters shocked by the scandal, was sentenced to 12 years in prison in a first trial held in the summer. He is on parole pending an appeal trial.
A former Goldman Sachs banker Tim Leissner has pleaded guilty in the United States for his role in this case. And a former Malaysian bank manager, Ng Chong Hwa, is also being sued in the United States.