Goldman Sachs pays $3.9bn to settle 1MDB scandal

Linda J. Dodson

Goldman Sachs will pay $3.9bn (£3.3bn) to Malaysian authorities following a massive fraud in which the country’s sovereign wealth fund was allegedly raided to buy Picasso paintings, jewellery and a mega-yacht.

The settlement ends a long-running investigation over Goldman’s role raising money for the scandal-hit 1MDB fund in 2013.

It is a major blow for the reputation of the investment bank, which has pinned the blame on rogue employees.

1MDB was set up to fund infrastructure projects in Malaysia. But as much as $4.5bn was allegedly siphoned off to fund the lavish lifestyles of some of Kuala Lumpur’s most influential families – including Najib Razak, its former prime minister, who lost power following a public outcry and is facing a verdict on corruption charges next week.

Police seized 284 boxes of luxury handbags and 72 bags filled with jewellery, cash and watches from Mr Razak’s property.

Jho Low, a Malaysian financier accused by prosecutors of leading the alleged heist, is believed to be on the
run.

He is claimed to have taken out enough money to buy a $30m Manhattan penthouse and the 300ft yacht Tranquility, which was later seized and sold for $126m.

The financier – who is facing criminal indictments in the US – cultivated an image as a hard-partying playboy.

He spent $8m on jewellery and a glass piano for Australian model Miranda Kerr and bought a Picasso painting for actor Leonardo DiCaprio’s birthday.

Mr Low denies wrongdoing.

US authorities allege that some of the proceeds of the scandal were laundered through real estate assets and even funded Hollywood movies such as The Wolf of Wall Street, in which DiCaprio starred as a corrupt trader.

Goldman’s investment banking unit was paid $600m for selling bonds on behalf of 1MDB in a deal overseen by star employee Tim Leissner, who has since admitted bribery and money-laundering in the US.

At the time, the investment bank was run by David Solomon, who is now Goldman’s chief executive.

He has not been accused of any wrongdoing.

Source Article

Next Post

UK firms fear China’s revenge over Huawei and Hong Kong

Mr Rous said many of the Council’s members felt the Government had not fully explained the reasons behind its U-turn on Huawei. “It is the sovereign right of any government to change policy but we want to understand, what is the evidence base for this?” he said. Dominic Raab, the […]

You May Like