The Goldman Sachs Group, Inc. was a U.S.-based global investment banking, securities, and investment management firm whose common stock was registered with the SEC and traded on the New York Stock Exchange. Goldman operated worldwide primarily through wholly-owned subsidiaries and affiliated entities. Goldman and its subsidiaries and affiliated entities, combined, had approximately 38,000 employees.
1Malaysia Development Berhad (“1MDB”) was a Malaysian state-owned and controlled investment fund created to pursue projects for the economic benefit of Malaysia and its people.
According to the documents in this case, between approximately 2009 and 2014, as 1MDB raised capital to fund its projects, billions of dollars were diverted from 1MDB. The diverted funds included a substantial portion of the approximately $6.5 billion in capital that 1MDB raised in 2012 and 2013 through three bond offerings that it executed with Goldman Sachs. As part of the scheme, certain former senior employees of Goldman Sachs authorized and paid bribes to government officials in Malaysia and in Abu Dhabi to obtain and retain lucrative business for Goldman Sachs, including bond offerings in 2012 and 2013, from which Goldman Sachs earned approximately $600 million.
In a settled administrative proceeding initiated on October 22, 2020, the SEC ordered Goldman Sachs to cease and desist violating the anti-bribery, books and records, and internal controls provisions of the FCPA. Under the terms of the settlement, Goldman Sachs agreed to disgorge $606,300,000 and pay a civil fine of $400,000,000. The SEC deemed that the disgorgement would be satisfied by the payment previously made to the Government of Malaysia and 1MDB pursuant to a settlement Goldman Sachs reached with the Malaysian government on August 18, 2020. Though the details of that settlement were not mentioned in this proceeding, media reports indicate that Goldman Sachs agreed to pay approximately $3.9 billion to the Malaysian government.
This enforcement action was part of a global settlement that included parallel enforcement actions brought by the DOJ, SEC, and several other domestic and foreign regulators against Goldman Sachs. In all, Goldman Sachs agreed to pay over $3 billion in fines and disgorgement, with approximately $2 billion of that total being paid to various U.S. authorities. The DOJ and SEC also previously brought enforcement actions against former Goldman Sachs executive Tim Leissner, and the DOJ also charged Goldman Sachs employee Ng Chong Hwa and Malaysian national Low Taek Jho.
