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Goldman Trying Not to Plead Guilty in State Fund 1MDB Scandal
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Engulfed in the scandal related to the multibillion-dollar 1Malaysia Development Bhd (1MDB), U.S. investment bank Goldman Sachs (GS - Free Report) is trying to get some relief from the consequences to be faced for its involvement by persuading the U.S. federal prosecutors, per the New York Times article.
Report states that lawyers for Goldman are seeking a review by U.S. Deputy Attorney-General Jeffery Rosen of the demands put forward by some federal prosecutors that the bank should pay more than $2 billion (RM8.5 billion) in fines and plead guilty to the charges.
Per the source, the bank has also requested for paying lower fines and is trying to avoid a guilty plea. “The request, which was made several weeks ago, is not unusual for a high-profile corporate investigation and often comes in the final stage of settlement talks. But, it has been a point of pride for Goldman that it has never had to admit guilt in a federal investigation, and the scandal has already been a black eye for the bank,” the report stated.
Further, it was specified that the coronavirus pandemic has delayed the negotiations and a resolution is likely to be out by early September. Notably, prosecutors in Brooklyn and the money laundering and kleptocracy group in Washington are heading the criminal investigation. Goldman’s spokesperson, Jake Siewert, said the bank is "continuing to engage with all the relevant authorities".
Per the report, investigation by the U.S. prosecutors began in 2015.
Background
Goldman has been scrutinized for playing a role in raising funds through bond offerings for 1MDB, the fund entangled in corruption and money-laundering probes in roughly six countries. Per the DoJ, misappropriation of funds, worth $4.5 billion, from 1MDB by top officials of the fund and their colleagues from 2009 through 2014, also included funds which were raised through Goldman.
Therefore, regulators of around 14 countries, including the United States, Malaysia, Singapore and others, have probed Goldman for its role as an underwriter and doings during the transactions.
Further, in November 2018, criminal charges were levied against two former bankers — Tim Leissner and Roger Ng of Goldman by the U.S. prosecutors, as well as on Low — a Malaysian financier who effectively had the control of the state-owned investment 1MDB. Low has been accused for routing the money out of 1MBD, and paying bribes and purchasing real estate, art, and jewelry. Nevertheless, the bond proceeds were meant for strategic investments for the state.
Per DoJ, roughly $600 million was earned by the bank, including three bond offerings in 2012 and 2013, which raised $6.5 billion. Further, huge bonuses were earned by Leissner, Ng and others. Nevertheless, Goldman claimed Leissner and Ng were working to hide criminal activities from bank management.
In 2018, Leissner accepted the act of conspiracy for laundering money and plotting the violation of the Foreign Corrupt Practices Act. He made profits from the scheme and had contracted to pay up to $43.7 million. Nonetheless, the other employee has not come with a plea and is facing a case in Brooklyn’s federal court.
Notably, criminal charges against Goldman and 17 executives have been filed by prosecutors in Malaysia and they are demanding a multibillion-dollar penalty.
Bottom Line
Although Goldman has resolved quite a few litigation issues, it still faces probes and queries from several federal agencies, and a few foreign governments for the bank’s businesses conducted during the pre-crisis period. As a result, the company’s legal expenses are expected to remain elevated, which might partially impede its bottom-line growth in the near term.
Shares of the company have lost 14.1% in the past six months compared with the 9% decline registered by the industry.
Goldman currently carries a Zacks Rank #3 (Hold).
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Tradeweb Markets Inc (TW - Free Report) has witnessed upward earnings estimate revisions for 2020 over the past 60 days. Moreover, this Zacks #1 Ranked (Strong Buy) stock has gained 38.4% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
GAIN Capital Holdings, Inc.’s current-year earnings estimate moved north in 60 days’ time. Further, the company’s shares have surged 38.9% over the past six months. At present, it holds a Zacks Rank of 2 (Buy).
Mackinac Financial Corporation has witnessed upward earnings estimate revision for the ongoing year in the past 60 days. This Zacks #2 Ranked stock has depreciated 40.3% over the past six months.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Goldman Trying Not to Plead Guilty in State Fund 1MDB Scandal
Engulfed in the scandal related to the multibillion-dollar 1Malaysia Development Bhd (1MDB), U.S. investment bank Goldman Sachs (GS - Free Report) is trying to get some relief from the consequences to be faced for its involvement by persuading the U.S. federal prosecutors, per the New York Times article.
Report states that lawyers for Goldman are seeking a review by U.S. Deputy Attorney-General Jeffery Rosen of the demands put forward by some federal prosecutors that the bank should pay more than $2 billion (RM8.5 billion) in fines and plead guilty to the charges.
Per the source, the bank has also requested for paying lower fines and is trying to avoid a guilty plea. “The request, which was made several weeks ago, is not unusual for a high-profile corporate investigation and often comes in the final stage of settlement talks. But, it has been a point of pride for Goldman that it has never had to admit guilt in a federal investigation, and the scandal has already been a black eye for the bank,” the report stated.
Further, it was specified that the coronavirus pandemic has delayed the negotiations and a resolution is likely to be out by early September. Notably, prosecutors in Brooklyn and the money laundering and kleptocracy group in Washington are heading the criminal investigation. Goldman’s spokesperson, Jake Siewert, said the bank is "continuing to engage with all the relevant authorities".
Per the report, investigation by the U.S. prosecutors began in 2015.
Background
Goldman has been scrutinized for playing a role in raising funds through bond offerings for 1MDB, the fund entangled in corruption and money-laundering probes in roughly six countries. Per the DoJ, misappropriation of funds, worth $4.5 billion, from 1MDB by top officials of the fund and their colleagues from 2009 through 2014, also included funds which were raised through Goldman.
Therefore, regulators of around 14 countries, including the United States, Malaysia, Singapore and others, have probed Goldman for its role as an underwriter and doings during the transactions.
Further, in November 2018, criminal charges were levied against two former bankers — Tim Leissner and Roger Ng of Goldman by the U.S. prosecutors, as well as on Low — a Malaysian financier who effectively had the control of the state-owned investment 1MDB. Low has been accused for routing the money out of 1MBD, and paying bribes and purchasing real estate, art, and jewelry. Nevertheless, the bond proceeds were meant for strategic investments for the state.
Per DoJ, roughly $600 million was earned by the bank, including three bond offerings in 2012 and 2013, which raised $6.5 billion. Further, huge bonuses were earned by Leissner, Ng and others. Nevertheless, Goldman claimed Leissner and Ng were working to hide criminal activities from bank management.
In 2018, Leissner accepted the act of conspiracy for laundering money and plotting the violation of the Foreign Corrupt Practices Act. He made profits from the scheme and had contracted to pay up to $43.7 million. Nonetheless, the other employee has not come with a plea and is facing a case in Brooklyn’s federal court.
Notably, criminal charges against Goldman and 17 executives have been filed by prosecutors in Malaysia and they are demanding a multibillion-dollar penalty.
Bottom Line
Although Goldman has resolved quite a few litigation issues, it still faces probes and queries from several federal agencies, and a few foreign governments for the bank’s businesses conducted during the pre-crisis period. As a result, the company’s legal expenses are expected to remain elevated, which might partially impede its bottom-line growth in the near term.
Shares of the company have lost 14.1% in the past six months compared with the 9% decline registered by the industry.
Goldman currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Tradeweb Markets Inc (TW - Free Report) has witnessed upward earnings estimate revisions for 2020 over the past 60 days. Moreover, this Zacks #1 Ranked (Strong Buy) stock has gained 38.4% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
GAIN Capital Holdings, Inc.’s current-year earnings estimate moved north in 60 days’ time. Further, the company’s shares have surged 38.9% over the past six months. At present, it holds a Zacks Rank of 2 (Buy).
Mackinac Financial Corporation has witnessed upward earnings estimate revision for the ongoing year in the past 60 days. This Zacks #2 Ranked stock has depreciated 40.3% over the past six months.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>