The role of Goldman Sachs in the 1MDB scandal – 300 words

The 1MDB corruption scandal clouded Goldman Sachs, raising questions about what the US investment bank knew about the misconduct.

What is Goldman accused of?

The firm helped raise $ 6.5 billion (5 billion pounds sterling) for the Malaysian Development Fund, providing advice on three bond offerings in 2012 and 2013.

Prosecutors allege that more than $ 2.7 billion was subsequently misappropriated, used to bribe government officials and buy luxury goods.

In November, Tim Leissner, Goldman's chief banker in the transactions, pleaded guilty in US court to involvement in corruption and money laundering projects.

The Attorney General of Malaysia then instructed Goldman to help "dishonestly hijack" the fund 's money.

He noted that the $ 600 million that Goldman earned for his job was "several times higher" than industry standards.

The company remains under investigation in other countries, including the United States, and is also subject to lawsuits from investors.

What does Goldman say?

According to Goldman, the charges against Malaysia are "misdirected".

He said the company's compliance officers were disappointed with some aspects of the transaction, including the role of Malaysian financier Jho Low, whom the bank had previously rejected as a customer.

However, reports revealed that former cabinet president Lloyd Blankfein had met with Low and former Malaysian Prime Minister Najib Razak.

Mr. Leissner, president of Goldman Southeast Asia until his departure from the company in 2016, said that the decision to hide information from Goldman compliance officials was "fully in line" with the culture of the company. l & # 39; company.

What penalties could Goldman incur?

Malaysian authorities are demanding fines in excess of $ 3 billion.

Goldman cautioned investors against the risk of "significant" penalties and increased legal liability funds to $ 1.8 billion.

As his legal fees increase, he also announced that he would hold back millions of dollars because of the presence of some of his leaders, including Mr. Blankfein, pending the outcome of the investigations.