Goldman to pay more than US$2b in 1MDB probe: Sources
Washington, DC
GOLDMAN Sachs Group has reached a long-awaited pact with the United States Department of Justice to pay more than US$2 billion for the bank's role in Malaysia's 1MDB scandal, and the deal may be announced within days, said people familiar with the matter.
The accord, part of an international action, will let the parent company avoid a US criminal conviction, the people said, who asked not to be named discussing the confidential talks.
The payment to the Justice Department is broadly in line with the bank's prior reserves and analysts' estimates. The deal, expected to come just weeks before the US presidential election, would remove uncertainty for the bank following years of investigations and negotiations with the department over the firm's fundraising for the 1MDB investment fund.
It follows an agreement in July to settle a related probe with Malaysia, in which the bank promised to pay US$2.5 billion. Malaysia dropped criminal charges against the New York-based company in early September.
In all, Goldman Sachs may pay roughly US$5 billion, once accords with Malaysia, the Justice Department and other agencies are tallied together. In Singapore, authorities plan to levy a financial penalty and issue a warning with conditions, and if the company breaches them, Goldman Singapore could be prosecuted, people familiar the matter said.
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Probes of the Wall Street firm focused on its work raising US$6.5 billion in 2012 and 2013 for the fund, much of which was later allegedly siphoned off by people connected to the country's former prime minister, Najib Razak.
Goldman's investment-banking group, led at the time by now-chief executive officer David Solomon, collected US$600 million from the bond sales. Authorities in Asia, the US and Europe have spent years tracing out the conspiracy and tracking down cash and assets around the globe, including condos, jewellery and art. BLOOMBERG
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