Malaysia US Goldman Sachs

In this May 14, 2015 file photo, construction workers chat in front of a billboard for state investment fund 1 Malaysia Development Berhad (1MDB) at the fund's flagship Tun Razak Exchange development in Kuala Lumpur, Malaysia.

WASHINGTON (AP) — A subsidiary of Goldman Sachs pleaded guilty on Thursday and agreed to pay more than $2.9 billion in a foreign corruption probe tied to the Malaysian 1MDB sovereign wealth fund, which was looted of billions of dollars in a corruption scandal. 

In addition, several current and former top executives at Goldman will have to return millions of dollars in pay and bonuses to the company, a financial penalty for those in charge when the scandal unfolded. 

Goldman Sachs Malaysia entered the plea in federal court in Brooklyn. As part of its plea, the company admitted that it “knowingly and willfully” conspired to violate US anti-bribery laws. 

The $2.9 billion includes payments to US and overseas regulators. The penalties also include roughly $600 million in profits Goldman made off the 1MDB scandal that it will have to disgorge. Goldman had previously reached a $3.9 billion settlement with the government of Malaysia. 

Goldman Sachs’ Board of directors decided to claw back pay and bonuses from top executives, including current CEO David Solomon and former CEO Lloyd Blankfein. The firm is in talks with additional executives to return part of their pay to the company over their role in the scheme. In total, more than $174 million in pay and bonuses are being returned to the company, the Board said. 

“The Board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm,” Goldman’s Board said in a separate statement. 

Malaysian and US prosecutors had alleged that bond sales organized by Goldman Sachs provided one of the means for associates of former Prime Minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia’s economic development.

The fund, 1Malaysia Development Berhad, was set up in 2009 by Najib to promote economic development. It relied primarily on debt to fund investment and economic development projects and was overseen by senior Malaysian government officials, according to court records.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.