New Accusations for Goldman Sachs, Bank Accepts Guilt

By: Yassmine ElSayed

CAIRO, Feb. 3 (SEE) - In an indication of guilt, Goldman Sachs announced that it could withhold some pay from top executives as a result of an ongoing criminal probe of a Malaysian investment fund.

The Wall Street firm said in a regulatory filing that its board of directors had approved such possibility, which could cost former CEO and Chairman Lloyd Blankfein and other top executives millions of dollars, depending on the outcome of an investigation into a Malaysian investment fund called 1MDB.

Goldman had helped raise $6.5 billion for the fund in 2012 and 2013 in three bond deals, but now faces charges by the Malaysian government, which claims assets were plundered from the fund.

Tomi Thomas, Malaysia public prosecutor, said in a statement that the US investment bank and four people, including two former Goldman Sachs employees, were accused of serious violations of Malaysian securities laws.

Prosecutors will seek fines against Goldman Sachs and the defendants for more than $ 3.3 billion, representing the alleged sum of $ 2.7 billion, as well as an additional $ 600 million of Goldman Sachs fees for arranging agreements.

Malaysia has filed criminal charges against US investment bank Goldman Sachs on December, while the bank said it was the victim of deceptive Malaysian officials.

Blankfein was CEO of Goldman for 12 years starting in 2006, but stepped down from the role in October, following the rumors about this Malaysian scandal, and retired as chairman at the end of December. His 2018 pay was $20.5 million, including $2 million salary, an $18.5 million bonus and more than $14 million in restricted shares that vest over time.

“It's very clear that the people of Malaysia were defrauded by many inpiduals, including the highest members of the prior government,” CEO David Solomon said during the bank’s earnings call. He referred to Tim Leissner, one of the bank executives involved in the issue. “Leissner was a partner at our firm, by his own admission, was one of those people. For his role in that fraud, we apologize to the Malaysian people.”

Worthy noting that this is not the first time the bank is involved in cases of farudness. Days ago, Financial times reported that United Natural Foods (UNFI) has sued Goldman Sachs over its guidance in the food distribution company’s $2.9 billion acquisition of the grocery chain SuperValu, accusing the investment bank of “exploiting its reputation, market power and influence over its client, UNFI, in an unbridled pursuit of profits.”

In November, an Abu Dhabi sovereign wealth fund has sued Goldman Sachs over the 1Malaysia Development Berhad scandal, accusing the US bank of bribing its officials during a “massive global conspiracy”.