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Goldman Might Face Amended Charges in 1MDB Scandal by Malaysia
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A new development has come to the front came into scene related to the multibillion-dollar 1Malaysia Development Bhd (1MDB) scandal, in which U.S. investment bank Goldman Sachs (GS - Free Report) is engulfed. Per a Bloomberg article, Malaysian prosecutors will inquire about amending charges against three units of the bank involved in the case.
Per proceedings at the Kuala Lumpur High Court, amendments to be proposed would also involve liability, while Goldman’s lawyers expect significant changes. Notably, the next case management hearing is scheduled for Sep 4 by the court.
Per a New York Times article last week, Goldman is also trying to get some relief from the consequences to be faced for its involvement by persuading the U.S. federal prosecutors. The 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.
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 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. In addition, 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, who are demanding a multibillion-dollar penalty seeking fines of more than $2.7 billion, which is believed to be allegedly misappropriated from the proceeds, and the return of $600 million of fees taken by Goldman.
Malaysian politics was impacted by the scandal and imposed lifetime bans against Goldman bankers, including Andrea Vella and Tim Leissner, from the financial industry.
Notably, the case which involved the three units of the bank had been on hold due to restrictions imposed by Malaysia since March to contain the coronavirus pandemic. This February, the case got transferred to the High Court advancing with the proceedings of the criminal charges first announced in December 2018.
Bottom Line
Although Goldman has resolved quite a few litigation issues, it still faces probes and queries from a number of 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 10.5% in the past six months compared with the 9.9% decline registered by the industry.
Goldman currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
AllianceBernstein Holding L.P. (AB - Free Report) has witnessed upward earnings estimate revisions for 2020 over the past 60 days. Moreover, this Zacks #1 Ranked (Strong Buy) stock has lost 10.4% 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 46.3% over the past six months. At present, it holds a Zacks Rank of 2 (Buy).
T. Rowe Price Group, Inc. (TROW - Free Report) has witnessed upward earnings estimate revision for the ongoing year in the past 60 days. This Zacks #2 Ranked stock has appreciated 2.3% over the past six months.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Image: Bigstock
Goldman Might Face Amended Charges in 1MDB Scandal by Malaysia
A new development has come to the front came into scene related to the multibillion-dollar 1Malaysia Development Bhd (1MDB) scandal, in which U.S. investment bank Goldman Sachs (GS - Free Report) is engulfed. Per a Bloomberg article, Malaysian prosecutors will inquire about amending charges against three units of the bank involved in the case.
Per proceedings at the Kuala Lumpur High Court, amendments to be proposed would also involve liability, while Goldman’s lawyers expect significant changes. Notably, the next case management hearing is scheduled for Sep 4 by the court.
Per a New York Times article last week, Goldman is also trying to get some relief from the consequences to be faced for its involvement by persuading the U.S. federal prosecutors. The 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.
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 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. In addition, 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, who are demanding a multibillion-dollar penalty seeking fines of more than $2.7 billion, which is believed to be allegedly misappropriated from the proceeds, and the return of $600 million of fees taken by Goldman.
Malaysian politics was impacted by the scandal and imposed lifetime bans against Goldman bankers, including Andrea Vella and Tim Leissner, from the financial industry.
Notably, the case which involved the three units of the bank had been on hold due to restrictions imposed by Malaysia since March to contain the coronavirus pandemic. This February, the case got transferred to the High Court advancing with the proceedings of the criminal charges first announced in December 2018.
Bottom Line
Although Goldman has resolved quite a few litigation issues, it still faces probes and queries from a number of 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 10.5% in the past six months compared with the 9.9% decline registered by the industry.
Goldman currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
AllianceBernstein Holding L.P. (AB - Free Report) has witnessed upward earnings estimate revisions for 2020 over the past 60 days. Moreover, this Zacks #1 Ranked (Strong Buy) stock has lost 10.4% 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 46.3% over the past six months. At present, it holds a Zacks Rank of 2 (Buy).
T. Rowe Price Group, Inc. (TROW - Free Report) has witnessed upward earnings estimate revision for the ongoing year in the past 60 days. This Zacks #2 Ranked stock has appreciated 2.3% over the past six months.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
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