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, Goldman Sachs engaged in a conspiracy to pay more than $1.6 billion in bribes, directly and indirectly, to foreign officials in Malaysia and Abu Dhabi in order to secure Goldman Sachs’ role as an advisor on energy acquisitions, as underwriter on three lucrative bond deals with a total value of $6.5 billion, and a potential role in a highly anticipated and even more lucrative initial public offering for 1MDB’s energy assets. Goldman Sachs employees paid bribes of over $1.6 billion to officials at 1MDB, the Malaysian government, and to officials at Abu Dhabi’s state-owned sovereign wealth fund, International Petroleum Investment Company. The bribes were paid out of over $2.7 billion in funds the Goldman Sachs employees misappropriated from the bond offerings underwritten by Goldman Sachs. In all, Goldman Sachs received approximately $606 million in fees on the deals.
On October 22, 2020, the DOJ filed a single count Information in the Eastern District of New York against Goldman Sachs alleging a conspiracy to violate the anti-bribery provisions of the FCPA. On the same date, Goldman Sachs entered into a deferred prosecution agreement with the DOJ. Under the terms of the settlement, Goldman Sachs agreed to pay over $2.9 billion in fines and disgorgement and to report on the status of the company's enhanced anti-corruption compliance policies and procedures for a term of three years. The DOJ required Goldman Sachs to pay only $1,263,088,000 of the total fine to the DOJ. The remainder of the $2.9 billion fine was credited for payments made to other agencies, both foreign and domestic: $154 million civil penalty to the Board of Governors of the Federal Reserve System; $400 million civil penalty in the parallel SEC enforcement action; $150 million civil penalty to the New York State Department of Financial Services; $126 million civil penalty to the United Kingdom's Financial Conduct Authority and Prudential Regulation Authority; $122 million in penalties to Singaporean authorities; $100 million of a total $350 million penalty to the Hong Kong Securities and Futures Commission; and $606 million in disgorgement paid to the Malaysian government or, alternatively, to the SEC. The DOJ gave Goldman Sachs partial credit for its cooperation and remediation but noted that the company had failed to disclose the misconduct and had delayed providing certain evidence during the investigation. Based on Goldman Sachs’ partial cooperation, the criminal fine was reduced by 10% below the minimum of the U.S. Sentencing Guidelines range.
This enforcement action was part of a global settlement that included parallel enforcement actions brought against Goldman Sachs by the DOJ, SEC, and the domestic and foreign regulators noted above. 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.
