Goldman Sachs CEO Admits His Ex-Employees Broke the Law in 1MDB Case

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Goldman Sachs chief executive officer David Solomon said on Wednesday he felt “horrible” that two former employees “blatantly broke the law” in their dealings with 1Malaysia Development Berhad (1MDB).

“It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law,” Solomon said in an interview with Bloomberg TV in Singapore.

Bloomberg

“I feel horrible about the fact that people who worked at Goldman Sachs, and it doesn’t matter whether it’s a partner or it’s an entry-level employee, would go around our policies and break the law,” Solomon said.

US prosecutors announced last week that Tim Leissner, former partner for Goldman Sachs in Asia, had pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act, and agreed to forfeit US$43.7 million (RM181.8 million).

Roger Ng, the other charged former Goldman banker, was arrested in Malaysia and is expected to be extradited.

Goldman has also placed its former co-head of Asia investment banking, Andrea Vella, on leave over his role in the firm’s involvement with the case, pending a review of allegations, according to a person familiar with the decision.

The Wall Street bank said in a securities filing on Friday that it may also face penalties from dealings with 1MDB.

In another interview with Bloomberg on Tuesday, Malaysia’s prime minister-in-waiting Anwar Ibrahim said it would be “inexcusable” if Goldman Sachs was complicit in the scandal.

Meanwhile, Finance Minister Lim Guan Eng told Goldman Sachs today to return the US$588 million (RM2.4 billion) fees it was paid for its work with 1MDB.

He said the American investment bank was paid the fees for raising bonds totalling US$6.5 billion (RM23.29 billion) for 1MDB in 2012 and 2013.

“They must pay us back this money, not only the US$588 million but much more than that,” he said.

He said there were consequential losses due to the fees paid as it had cost Malaysia big losses.

He claimed it might not only be the employees who were involved in the dealings with 1MDB; it could even go “all the way to the top”.

Reportedly, Leissner, Ng and others received large bonuses in connection with that revenue.