TechFlow news — Goldman Sachs will pay a record foreign bribery penalty in the United States and will plead guilty for the first time over its role in the corruption surrounding Malaysia's 1MDB investment fund.
According to a statement released on the Hong Kong Securities and Futures Commission (SFC) website on the 23rd, Goldman Sachs (Asia) LLC ("Goldman Asia") has been censured and fined $350 million (HK$2.71 billion) by the SFC due to serious failures and deficiencies in management oversight, risk management, compliance, and anti-money laundering controls. These shortcomings allowed $2.6 billion of the $6.5 billion raised by 1Malaysia Development Berhad (1MDB) through three bond offerings in 2012 and 2013 to be misappropriated.
U.S. prosecutor Alixandra Smith said that under the plea agreement, Goldman Sachs will pay more than $2.3 billion in penalties—the largest such fine in U.S. history. The total amount the bank will pay globally exceeds $5 billion.
According to a report by the Securities Times, based on an announcement released by the U.S. Department of Justice, Goldman Sachs admitted to violating the Foreign Corrupt Practices Act (FCPA), acknowledging it paid over $1 billion in bribes to officials in Malaysia and Abu Dhabi to secure lucrative business, including underwriting three bond transactions for 1Malaysia Development Bhd (1MDB) totaling approximately $6.5 billion, from which Goldman earned hundreds of millions of dollars in underwriting fees.
