Goldman Sachs, one of Wall Street’s most powerful investment banks, agreed to a US$2.9 billion settlement with US federal prosecutors and the Department of Justice (DoJ) on Thursday to resolve a sprawling money laundering and bribery probe involving state investment fund 1Malaysia Development Berhad, or 1MDB.
The agreement brings closure to one of the biggest scandals ever faced by the bank, one which saw the looting of billions raised in bond offerings arranged by Goldman and stolen funds landing in the personal bank account of former Malaysian prime minister Najib Razak, who lost re-election in 2018 due in large part to public anger over corruption.
But whether the long-awaited settlement has delivered justice is another question. The bank has consistently denied institutional culpability in 1MDB’s fraudulent dealings. Though humbling, the multi-billion dollar settlement is less onerous than investors had previously feared and shields Goldman from the consequences of a parent-level guilty plea.
Under the terms, the bank will pay a $2.3 billion fine for violating anti-bribery laws and will disgorge $600 million of ill-gotten gains as part of a deferred prosecution agreement for its violation of the US Foreign Corrupt Practices Act, which bans companies in the United States from paying foreign government officials for help in gaining or retaining business.
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Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.
