WASHINGTON • Goldman Sachs Malaysia, a unit of the investment banking group, yesterday pleaded guilty to US Department of Justice charges over its role in Malaysia's 1MDB corruption scandal, as it looks to settle a probe that has dogged the bank for years.
In a court hearing, Goldman Sachs said it would plead guilty to violating the anti-bribery provisions of the Foreign Corrupt Practices Act in relation to the scandal.
Later in the day, Goldman was expected to agree to pay more than US$2 billion (S$2.71 billion) to settle the charges over its role in the scandal.
Separately, Hong Kong's markets watchdog yesterday fined Goldman Sachs' Asian business US$350 million for its role in the 1MDB scandal, the largest single fine ever levied by the Hong Kong regulator.
The Securities and Futures Commission (SFC) said serious lapses and deficiencies in management controls at Goldman Sachs (Asia) had contributed to the misappropriation of US$2.6 billion raised by the Malaysian sovereign wealth fund. 1Malaysia Development Berhad (1MDB) raised the funds in three bond offerings in 2012 and 2013.
A Goldman Sachs spokesman said the Wall Street bank would issue a statement in due course.
In July, Goldman agreed to pay US$3.9 billion to settle Malaysia's criminal probe.
The Malaysian and US authorities estimate US$4.5 billion was stolen from 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials in the fund, former Malaysian prime minister Najib Razak, Goldman staff and others.
The three bond offerings, which raised a combined US$6.5 billion, were arranged and underwritten by United Kingdom-based Goldman Sachs International, with work conducted by team members in multiple jurisdictions, who shared the revenue generated.
The SFC said Goldman Sachs Asia, the bank's Hong Kong-based compliance and control hub for the region, had significant involvement in the origination, approval, execution and sales process of the three offerings.
The bank's Asia hub had earned US$210 million from the offerings, the largest share among the various Goldman entities.
"This enforcement action is the result of a rigorous, independent investigation conducted by the SFC," said Ms Ashley Alder, the commission's chief executive.
The 1MDB bond deals were obtained for Goldman by its banker Tim Leissner, who in August 2018 admitted that he had conspired with Malaysian financier Jho Low and others to pay bribes and kickbacks to Malaysian and Abu Dhabi officials to obtain and retain the business from 1MDB for the bank.
Low denies any wrongdoing.
REUTERS
