On October 22, 2020, Goldman Sachs agreed to pay a hefty $2.9 billion settlement for its involvement in the 1MDB scandal. This settlement includes a $1.3 billion fine and $1.6 billion in assets that were allegedly stolen from 1MDB, the Malaysian investment fund.
The U.S. Department of Justice (DOJ) filed charges against two former Goldman Sachs bankers, Tim Leissner and Roger Ng, for their involvement in the 1MDB scandal. Leissner pleaded guilty and is currently cooperating with prosecutors. Ng is currently fighting extradition to the U.S. to face charges.
Goldman Sachs also entered into a Deferred Prosecution Agreement (DPA) with the DOJ. A DPA is a legal agreement between a prosecutor and a defendant in a criminal case. In this case, Goldman Sachs agreed to pay the fine and forfeit the assets, and also admitted to wrongdoing in the 1MDB scandal. In return, the DOJ agreed to delay prosecution of the company for three years, as long as Goldman Sachs continues to cooperate with the investigation and implements internal reforms.
The 1MDB scandal involved the embezzlement of billions of dollars from the Malaysian investment fund, which was set up by the Malaysian government to promote economic development. The embezzlement was allegedly carried out by a Malaysian financier, Jho Low, and his associates, who used the stolen money to finance a lavish lifestyle, including the purchase of luxury yachts, properties, and artwork. The scandal has implicated several high-profile individuals, including former Malaysian Prime Minister Najib Razak, who is currently serving a 12-year jail sentence for his role in the scandal.
The Goldman Sachs settlement is one of the largest in the history of the DOJ`s Foreign Corrupt Practices Act (FCPA) unit, which investigates companies for bribery and corruption. The settlement sends a strong message to companies that engage in corrupt practices and highlights the importance of internal compliance and risk management.
In conclusion, the Goldman Sachs settlement and DPA for its involvement in the 1MDB scandal marks a significant step in holding companies accountable for their actions and sends a clear message that corruption will not be tolerated. It also underscores the importance of implementing internal compliance and risk management procedures to prevent such scandals from occurring in the future.