KUALA LUMPUR, Oct. 21 — Wall Street investment bank Goldman Sachs is set to pay more than US$2 billion (RM8.3 billion) in penalties to the US Department of Justice (DOJ) as part of yet another settlement related to the global 1Malaysia Development Berhad (1MDB) financial scandal.
A report by the New York Times (NYT) quoted a source familiar with investigations, who revealed the latest round of settlements is caused by an Asian subsidiary of the investment bank that will have to plead guilty to corruption and bribery charges in the US, related to 1MDB, set to be formally announced tomorrow.
The name of the Asian subsidiary was not revealed.
“The Wall Street bank’s parent company will admit mistakes, the person said, but will not itself have to enter a guilty plea as part of the deal with federal prosecutors,” said the report referring to Goldman.
“The bank will also avoid the appointment of an outside monitor to review its compliance procedures,” it said.
It also detailed that the more than US$2 billion payment from Goldman is part of the settlement to be paid out to the DoJ and US securities and banking regulators.
The latest round of settlements marks an end to an almost two-year-long negotiation between the Wall Street bank and US federal prosecutors and the DoJ surrounding the 1MDB scandal, one that has undoubtedly tainted the reputation of the investment bank.
According to NYT, Goldman had never before the 1MDB case had to plead guilty despite alleged involvement in past financial scandals, but warned that a statement of facts set to be released along with the settlement tomorrow would put the bank “in a poor light”.
Goldman had in July this year agreed to a payout of US$2.5 billion (RM10.37 billion) and to guarantee over US$1.4 billion (RM5.81 billion) in assets set to be recovered by the Malaysian government for the role in the scandal.
The Wall Street bank is set to part with more than US$5 billion (RM20.75 billion) in settlements and payouts related to its involvement in the scandal.
Bonds worth around US$6.5 billion (RM26.97 billion) were raised by Goldman for 1MDB, with the bank paid US$600 million (RM2.4 billion) for their involvement.
About US$2.6 billion (RM10.8 billion) is alleged to have been siphoned from the fund into the bank accounts of Najib and his associates, including fugitive financier Low Taek Jho, or Jho Low, and stepson Riza Shariz Abdul Aziz.
He faces at least four more trials related to abuses stemming from 1MDB and has already been convicted in one.
In July this year, Najib was found guilty of all seven charges in his RM42 million SRC International corruption trial and given a 12-year prison sentence and fined RM210 million but his sentencing was stayed following an appeal.
Earlier this week, a former fundraiser for Donald Trump’s 2016 election campaign, Elliot Brady, pleaded guilty to conspiring to violate foreign lobbying laws after accepting US$9 million (RM37.35 million) from Jho Low to try and persuade the Trump administration to end the 1MDB investigation, and take other alternatives.
Broidy yesterday agreed to forfeit US$6.6 million (RM27.4 million) and cooperate with investigators.
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