Goldman Sachs to fork US$2bn in new 1MDB related charges

Goldman Sachs will pay more than US$2.8 billion (RM8.3 billion) in penalties to the US Department of Justice (DOJ).

The banker also has to admit fault for the 1MBD corruption scandal, for the first time. This will damage its reputation further, observers say. 

According to Reuters, Goldman will pay a penalty of about $2.2 billion and return roughly $600 million in ill-gotten gains.

A report by the New York Times (NYT) reveals an Asian subsidiary of the investment bank is the cause of the latest round of settlements.

The subsidiary will have to plead guilty to corruption and bribery charges in the US. All the charges are related to 1MDB.

The paper did not reveal the name of the Asian subsidiary.

Wall Street Journal says the settlement amount is lower than the $3.2 billion Goldman set aside for ongoing regulatory and legal matters.

The US$2.8 billion payment from Goldman is part of the settlement to the DoJ and US securities and banking regulators.

This adds to the bad name of the banking institution, which is already heavily tainted with the 1MDB scandal.

In July, Goldman agreed to pay US$2.5 billion (RM10.37 billion) to the Malaysian government for the role in the scandal.

It also guarantees over US$1.4 billion (RM5.81 billion) in assets that Malaysia will recover.

The additional US2 billion brings the total the bank has to pay out as fines and so on to US$5 billion (RM20.75 billion).

Related to 1MDB, Elliot Brady linked to Donald Trump’s 2016 election campaign, pleaded guilty to conspiring to violate foreign lobbying laws.

Reports say he accepted US$9 million (RM37.35 million) from Jho Low to try and persuade the Trump administration to end the 1MDB investigation.

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