[ad_1]
KUALA LUMPUR / SINGAPORE / WASHINGTON / NEW YORK (Nov. 30): The Federal Reserve is stepping up its investigation into how Goldman Sachs Group Inc. executives have ducked the bank's internal controls while helping the Malaysian authorities raise billions of dollars informed people on the issue.
The survey examines the actions of the investment bank based in New York as well as that of individuals. It has gained momentum in recent weeks, said people, asking not to be identified because the investigation was confidential. The Fed does not have the powers of a prosecutor, but it often sanctions those involved in banking scandals.
The Fed previously interviewed current and former employees of the company, stressing how easy it was to bypass compliance systems, officials said. In recent weeks, Goldman Sachs representatives have met the Fed and defended the bank's controls, according to a person familiar with the case.
As the main regulator of Goldman Sachs, the Fed has wide power to sanction the bank or impose other changes. Earlier this year, the size of Wells Fargo & Co. was limited until the lender strengthened internal controls.
"The Federal Reserve's policy is not to confirm or deny the existence of investigations," the central bank said in a statement. "We refer criminal violations to the Ministry of Justice if necessary and we implement our enforcement, security and robustness authorities if the facts are justified."
Advocacy of Leissner
In a conviction this month, Tim Leissner, former head of Goldman Sachs for Southeast Asia, said he and others had conspired to conceal the facts from legal staff and of cabinet compliance. Leissner said that he and his colleagues had hidden, for example, the involvement of controversial financier Low Taek Jho while seeking to raise more than $ 6 billion on behalf of 1Malaysia Development Bhd., A company of Investment from the Malaysian state allegedly looted by the investigators.
US prosecutors accused Low of planning schemes to launder money from 1MDB and pay bribes to Malaysian government officials. Low and a group of Malaysians allegedly embezzled some of the money raised to disguised personal accounts to look like legitimate businesses. Low maintains his innocence.
Leissner pleaded guilty to US charges, conspired to launder money, and contravened the Foreign Corrupt Practices Act. He was sentenced to lose $ 43.7 million. He admitted to bribing officials in Malaysia and the UAE to obtain bond contracts for Goldman Sachs. He explained that he and others had organized the 1MDB fundraiser in the form of debt offer as it would generate higher fees for the bank.
In a statement to the court, Mr. Leissner said his behavior was "entirely consistent with the Goldman Sachs culture of concealing the facts from certain legal and compliance employees." The Department of Justice also stated in documents that Goldman Sachs' corporate culture, in Southeast Asia in particular, gave priority to reaching agreements prior to the smooth operation of its business. compliance functions.
Nevertheless, DOJ records indicated that individual bankers had knowingly bypassed the controls that the bank had put in place and hid some details of the deal to prevent compliance officers from seeking to block the company's participation in the transactions. .
Since prosecutors unveiled their charges this month, analysts and investors are trying to gauge the financial implications for Goldman. In behind-the-scenes interviews with the authorities, the company has presented information that largely isolates Leissner's responsibility, said people familiar with the exchanges. However, publicly, he acknowledged that he could spend a lot of money to solve the case.
"The company has received subpoenas and requests for documents and information from various government and regulatory bodies," including the Department of Justice, wrote the company in a document filed this month in which it mentioned the interests of the Fed.
Goldman stated in the file that he was cooperating with the investigators and that he can not predict the outcome, "any proceedings brought by the DOJ or any other governmental or regulatory authority could result in the imposition of fines, penalties and other important sanctions ".
Source link
