Goldman Sachs will pay $2.9B to settle foreign bribery charges

Getty Images

Goldman Sachs will pay $2.9 billion to settle charges that it violated federal anti-corruption laws by bribing government officials to secure billions in business for the investment bank’s Malaysian subsidiary, the Justice Department announced Thursday.

Goldman admitted in the U.S. District Court for the Eastern District of New York to violating the Foreign Corrupt Practices Act (FCPA) by bribing government officials in exchange for the ability to underwrite $6.5 billion in bond offerings by 1Malaysia Development Bhd. (1MBD), a state-owned development fund, and other business opportunities.

Between 2009 and 2014, Goldman employees engaged in a scheme to pay more than $1.6 billion to bribe government officials in Malaysia and Abu Dhabi, according to prosecutors.

Goldman employees also conspired with others to use $2.7 billion from bond offerings underwritten by the bank to secure other bond underwriting opportunities.

Prosecutors said the bank also admitted to ignoring and waiving off red flags about the potential legal issues raised by the deals in question. Goldman made approximately $606 million in fees and revenue from the businesses opportunities secured by the bribery scheme.

“Today’s resolution, which requires Goldman Sachs to admit wrongdoing and pay nearly three billion dollars in penalties, fines, and disgorgement, holds the bank accountable for this criminal scheme and demonstrates the department’s continuing commitment to combating corruption and protecting the U.S. financial system,” said acting Assistant Attorney General Brian C. Rabbitt.

Goldman agreed to pay $2.3 billion in fines levied by the Justice Department and Securities and Exchange Commission and give up the $606 million earned through the scheme. The fine is the largest FCPA penalty ever paid to U.S. authorities, according to the Justice Department.

“This has been a long process and we are pleased to be putting these matters behind us. But, we are not putting the lessons learned from this experience behind us,” Goldman Sachs chairman and CEO David Solomon wrote in a public memo to the bank’s employees.

“We must continue to hold ourselves to the highest standards, and each of us has a vital role to play.”

Tags 1MDB Goldman Sachs

Most Popular

Load more


See all Video