Goldman Sachs Group Inc.’s Asian unit was fined US$350 million ($474.2 million) by Hong Kong’s financial regulator over its role in Malaysia’s 1MDB investment-fund scandal.
The U.S. bank was “reprimanded” for “serious lapses and deficiencies in its management supervisory, risk, compliance and anti-money laundering controls,” the Securities and Futures Commission said in a statement. Goldman Sachs Asia’s acceptance of the SFC’s findings and disciplinary action facilitated an early resolution of the matter, it said.
Goldman is also poised to reach a long-awaited pact with the U.S. Department of Justice to pay more than US$2 billion to resolve a criminal investigation into the bank’s role in the 1MDB scandal, people familiar with the matter told Bloomberg News this week.
The settlement follows Goldman Sachs’ July agreement 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.
A Hong Kong-based Goldman spokesman said on Thursday that the bank will issue a formal statement in due course.
In all, Goldman Sachs may pay roughly US$5 billion once accords with Malaysia, the Justice Department and other agencies are tallied together.
Over much of a decade, 1MDB has become shorthand for one of the world’s most daring heists -- a conspiracy that spawned probes in Asia, the U.S. and Europe. Authorities spent years tracking funds that allegedly flowed from 1MDB into high-end art and real estate, a super yacht and, ironically, the hit Hollywood movie “The Wolf of Wall Street,” chronicling an earlier era of financial crimes.
The bond sales raised a combined US$6.5 billion and were arranged by Goldman Sachs International, a London-based unit.
The Hong Kong regulator said Goldman’s Asia control hub based in the city “had significant involvement in the origination, approval, execution and sales process of the three 1MDB bond offerings.” The bank received 37% of the total revenue of US$567 million generated from the bond offerings, or US$210 million, the largest share among the various Goldman entities, the SFC said.
