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Goldman Sachs To Pay $2.9 Billion Fine


Image via BP Miller on Unsplash

Goldman Sachs has agreed to pay more than $2.9 billion to various regulators around the world for its role in the 1MDB scandal which has embroiled the bank over the last few years.


The settlement, which follows a $3.9 billion settlement with the Malaysian government in July, will see Goldman pay about $1.3 billion to the U.S. Department of Justice, marking the largest penalty ever under the Foreign Corrupt Practices Act. Deals were agreed to with regulators in the U.S., the U.K., Singapore and Hong Kong, which separately fined Goldman $350 million.


Goldman's Malaysian subsidiary pleaded guilty for its role in the scandal and admitted to one count of conspiracy to violate the Foreign Corrupt Practices Act. According to filings, Goldman puts the total cost of the scandal at $5.1 billion as a result of credits for payments to other countries, although Goldman could still face civil penalties.


"Goldman Sachs today accepted responsibility for its role in a conspiracy to bribe high-ranking foreign officials to obtain lucrative underwriting and other business relating to 1MDB,” acting Assistant Attorney General Brian C. Rabbitt said. The settlement requires Goldman to "admit wrongdoing and pay nearly three billion dollars in penalties, fines, and disgorgement, holds the bank accountable for this criminal scheme."

Funds from the scheme were used by Low Taek Jhowho is accused of being the mastermind, to purchase a $250 million yacht, invest $100 million in the production of The Wolf of Wall Street and to purchase real estate across the world. Jho Low, as he is frequently called, is now an international fugitive sought by the authorities in Malaysia, Singapore, and the U.S. Low is currently believed to be residing in China.


With the scandal costing the company billions, Goldman's board of directors issued a statement saying it will claw back or cut $174 million in compensation from current and former employees, including current CEO David Solomon and former CEO Lloyd Blankfein.


"The board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm," Goldman's board said.

With the saga nearing an end we now wait to see if Leonardo DiCaprio, who even once thanked Low by name when accepting a Golden Globe for his role in The Wolf of Wall Street, will be in a film adaption of the 1MDB scandal.


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