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(Bloomberg) – David Solomon had a message for Goldman Sachs Group Inc. employees shaken by the company's involvement in a multi-billion dollar fraud scandal: It's not us.
"I am personally outraged that any employee of the company will undertake the actions set out in the government's pleas," said the company's general manager in a voice message left to employees on Wednesday. "The behavior of these people is reprehensible and inconsistent with the good work and integrity that defines the work that 40,000 of you perform each day."
The bank's shares have suffered since prosecutors implicated a trio of Goldman Sachs bankers in a multi-billion dollar Malaysian fraud earlier this month. Monday – when the country's finance minister announced that he would ask for a full refund of all the fees he paid for 1MDB transactions – Goldman's shares fell to a seven-year low.
The bank's shares fell for the fifth consecutive day on Thursday, down 0.3% in New York at 11:43, which would put it on the path to the biggest five-day drop in seven years and reduce the value Goldman's market of more than 10 billion dollars.
Analysts and investors are trying to estimate the financial impact of the scandal for the firm, after announcing in a report released this month that it could face heavy fines. Solomon said in his voice box that "any speculation in the press or elsewhere" about the results of the company "is totally unfounded".
A spokesman for Goldman Sachs confirmed the authenticity of the voice message and declined to comment further.
Malaysia Ties
Goldman Sachs tries to counter the arguments that the fault concerns only a few employees. Tim Leissner, the former president of the bank for Southeast Asia, admitted in a plea that he had bribed officials to obtain the bond contracts and asserted that a culture of secrecy to the investment bank had led him to conceal wrongdoing to the company's compliance staff.
Lloyd Blankfein, then CEO of the company, personally helped establish ties with the country and a year ago, before Goldman Sachs organized bond deals at the heart of the investigations. Mr Blankfein attended a meeting in 2009 with the former Malaysian prime minister, who laid the groundwork for relations between the two entities, Bloomberg said for the first time this month.
Read more: Blankfein, from Goldman, reportedly attended the 2009 meeting of the 1MDB
"According to the reputation, it is a disaster for Goldman," said analysts Wednesday from Oppenheimer & Co., headed by Chris Kotowski. "Goldman is clearly at risk of significant charges with significant penalties in this case."
Analysts at Sanford C. Bernstein & Co. believe that Goldman Sachs could be fined up to $ 2 billion as a result of the scandal. According to them, this figure was "finally manageable" for society.
"A group of people, including some of us at the executive office, are intensely focused on this issue," Solomon said on voice mail. "For us, our job is to focus on our customers, our business and the many opportunities ahead."
(Updates with 1MDB background, comments from analysts in the last four paragraphs.)
–With the assistance of Felice Maranz.
To contact the reporters on this story: Keith Campbell in London at [email protected] Jenny Surane in New York at [email protected]
To contact the makers of this story: Michael J. Moore at [email protected], Daniel Taub
For more articles like this, go to bloomberg.com
© 2018 Bloomberg L.P.
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