Goldman Sachs Is in Talks for Asia Unit to Admit Guilt in 1MDB
Goldman Sachs Is in Talks for Asia Unit to Admit Guilt in 1MDB
(Bloomberg) -- Goldman Sachs Group Inc. is negotiating a settlement of the 1MDB scandal that would include an admission of guilt by one of its subsidiaries instead of the parent company, according to people familiar with the matter.
The guilty plea would come from a unit in Asia, the people said, asking not to be identified because the talks are confidential. The agreement would also include a fine of almost $2 billion, the people said.
Federal agencies have been seeking penalties between $1.5 billion and $2 billion in recent weeks, less than what some analysts had previously predicted, Bloomberg reported earlier this month.
Banks often push for subsidiaries to plead guilty to wrongdoing in order to avoid the impact on business that would come from a parent company’s admission of guilt. The deal could include an independent monitor to oversee compliance, Dow Jones reported earlier Thursday.
Spokespeople for Goldman and U.S. Attorney Richard Donoghue in Brooklyn, New York, where the case is pending, didn’t have an immediate comment. The bank has previously said it continues to cooperate with all investigating authorities.
The bank is separately negotiating a settlement with Malaysian authorities, who have in recent discussions floated much lower figures than their public stance of wanting to recover $7.5 billion. Goldman is still privately seeking to reduce its sanctions, arguing that the crimes were committed by a rogue employee and that the bank wasn’t aware of the misconduct.
Goldman’s involvement with 1MDB has triggered one of the biggest blows to its reputation in recent years, leading to a litany of investigations and embarrassing revelations of a former banker bribing government officials.
1MDB became the hub of a global corruption and embezzlement scandal in which a massive amount of cash was allegedly diverted to corrupt officials and financiers. Goldman helped the state investment fund raise cash, with the Wall Street bank making about $600 million from $6.5 billion in bond sales in 2012 and 2013.
--With assistance from Jesse Hamilton, Ben Bain, Tom Schoenberg and Jeffrey D Grocott.
To contact the reporters on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net;Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson
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