Goldman Could Face Significant Penalties From 1mdb

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PETALING JAYA: Goldman Sachs Group has acknowledged that its firm could potentially face "significant penalties" resulting from the 1Malaysia Development Bhd scandal
The Wall Street Journal reported that in the firm's third-quarter earnings report's filing to regulators, Goldman made citations on the indictment against its former employees for bribery and money laundering involving 1MDB
The report said in the firm's filing, it acknowledged that it could face "significant penalties resulting from 1MDB, but said it was also cooperating with investigators"
It also said in Goldman's filing, the firm had highlighted weaknesses in its compliance programme
The report said Goldman wrote in its filing: “system of internal accounting controls could be easily circumvented and that the firm’s business culture, particularly in Southeast Asia, at times, prioritised consummation of deals ahead of the proper operation of its compliance functions.”The report said, according to the filing, former Goldman bankers Tim Leissner and Roger Ng had "circumvented the firm’s internal accounting controls, in part, by intentionally deceiving control personnel and internal committees."Goldman is said to have received nearly RM2.487bil  (US$600mil) in fees from the 1MDB deal
Previously, the Financial Times reported that Goldman had helped 1MDB sell about RM27.06bil (US$6.5bil) of bonds between 2012 and 2013, two years before the authorities raided 1MDB’s offices to investigate allegations of massive fraud
In a filing to the Securities and Exchange Commission on Friday (Nov 2), Goldman estimated that possible losses relating to litigation proceedings could run as high as US$1.8bil (RM7.49 bil) above its total reserves for such matters
Previously, Goldman estimated litigation losses to be in excess of US$1.5bil (RM6.24 bil)
The Financial Times had also reported that almost 30 people from Goldman had reviewed the 1MDB deal's approval process
Meanwhile, in a 2016 indictment, the US Department of Justice (US DoJ) alleged that most of the money raised with Goldman’s help was siphoned off by Low Taek Jho, also known as Jho Low
Low, the fugitive businessman together with bankers Ng and Leissner, have been indicted by the US DoJ on Thursday (Nov 1) for conspiring to launder money and violating the Foreign Corrupt Practices Act in relation to 1MDB
Leissner pleaded guilty to conspiring to launder money and to violating anti-bribery laws. He has been ordered to forfeit US$43.7mil (RM182.27mil) as a result of his crimes
The charges relating to 1MDB are the first by DoJ
In 2016, the DoJ reportedly recovered over US$1bil (RM4.17bil being the current conversion rate) that was allegedly stolen, and sought the forfeiture of property including a Bombardier private jet, Manhattan penthouse, Beverly Hills mansion and paintings by Vincent Van Gogh and Claude Monet
Low, is currently wanted in Malaysia and Singapore, and other countries over investigations into 1MDB
Malaysia has applied for a Red Notice to seek assistance from countries such as the United Arab Emirates, Indonesia, India, Myanmar, China and Hong Kong via Interpol, and Taiwan via diplomatic channels to arrest Low.- Star

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