SEC charges Goldman Sachs with FCPA violations related to 1MDB bribe scheme
The United States Securities and Exchange Commission (SEC) today announced charges against The Goldman Sachs Group Inc. for violations of the Foreign Corrupt Practices Act (FCPA) in connection with the 1Malaysia Development Berhad (1MDB) bribe scheme.
As part of coordinated resolutions, Goldman has agreed to pay more than $2.9 billion, which includes more than $1 billion to settle the SEC’s charges.
According to the SEC’s order, beginning in 2012, former senior employees of Goldman Sachs used a third-party intermediary to bribe high-ranking government officials in Malaysia and the Emirate of Abu Dhabi. The order finds that these bribes enabled Goldman Sachs to obtain lucrative business from 1MDB, a Malaysian government-owned investment fund, including underwriting approximately $6.5 billion in bond offerings.
The SEC’s order finds that Goldman Sachs violated the anti-bribery, internal accounting controls, and books and records provisions of the federal securities laws. Goldman Sachs agreed to a cease-and-desist order and to pay $606.3 million in disgorgement and a $400 million civil penalty, with the amount of disgorgement satisfied by amounts it paid to the Government of Malaysia and 1MDB in a related settlement.
In December 2019, the SEC charged former Goldman Sachs Group Inc. participating managing director Tim Leissner for his role in the 1MDB bribery scheme.
In a related action, the Federal Reserve Board today announced it has fined the Goldman Sachs Group, Inc. $154 million for the firm’s failure to maintain appropriate oversight, internal controls, and risk management with respect to Goldman’s involvement in a far-reaching scheme to defraud 1MDB.
Earlier today, the Hong Kong Securities and Futures Commission (SFC) imposed a record $350 million penalty on Goldman Sachs Asia for failures related to 1MDB bond offerings.