The 1Malaysia Development Berhad scandal (1MDB) is an ongoing political scandal occurring in Malaysia. The settlement would allow Goldman Sachs to avoid a criminal conviction in the US over the bribery and money laundering scandal that saw three of its former bankers banned for life from the banking industry by the Federal Reserve Board, according to Axios.
An Asian subsidiary of Goldman Sachs agreed to plead guilty to US charges, as part of a global regulatory settlement that includes more than USD 2 billion in new penalties. The settlement is expected to be announced this week, the online publication has cited Financial Times.
Context: Per Axios' Felix Salmon, the bank facilitated the 1MDB fraud, earning almost $600 million in fees on three bond deals from the deeply corrupt Malaysian fund. Each time, as soon as Goldman provided the money to 1MDB, Jho Low, a former financier to ex-Prime Minister Rajib Najib, would steal it.
In 2015, Malaysia's then-Prime Minister Najib Razak was accused of channelling over USD 700 million from 1Malaysia Development Berhad (1MDB), a government-run strategic development company, to his personal bank accounts. Najib was sentenced to 12 years in prison after being found guilty of all seven corruption charges against him over the 1MDB case.
In response to reports, Head of Corporate Accountability at Global Witness, Rachel Owens, said: ‘The 1MDB scandal lays bare the role of global finance in fuelling corruption. Multinational corporations like Goldman Sachs enjoy unprecedented wealth, power, and privilege. Many abuse that power to the detriment of people and planet.
On the back of today’s settlement announcement, the world is looking to the EU to act - to have a truly sustainable economy and society, human rights, environmental and corruption impacts must be at the heart of the EU’s sustainability agenda including how it regulates and holds corporates to account. EU companies and finance must be part of the solution, instead part of the problem, and for this to happen the EU must introduce rules to hold them to account for their role or that of their subsidiaries in facilitating or perpetrating corruption.’
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now