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Goldman Sachs to pay $2B finally ending 1MDB scandal

Jeremy
Wilson
1 month ago
2 mins read

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American multinational bank Goldman Sachs is expected to pay over $2 billion regarding its role in the Malaysian 1MDB scandal. The bank agreed to the payment after reaching a deal with the U.S Department of Justice, Reuters reports.

The payment is set to be made this week after Goldman Sachs will reportedly agree to be at fault over the Malaysian scandal. The bank was accused of underwriting a bond offering that raised $6.5 billion for the Malaysian state fund. 

The deal finally brings to an end controversies around that scandal that almost crippled Goldman’s operations.  Notably, Goldman has carried the overall guilt although its Asian subsidiary has admitted to wrongdoing in the bond offering. 

The bond offering was raised in 2012 and 2013. It is alleged that approximately $4.5 billion was looted by top fund officials between 2009 and 2014. 

Back in July, Goldman Sachs also paid $3.9 billion settling a lawsuit by the Malaysian government. However, in its defense, Goldman has maintained that it was misled by bankers handling the bond issue. 

Goldman to be more aggressive after settlement 

Goldman Sachs has witnessed a decade of underperformance and the scandal has hampered efforts to return to profitability. The bank’s Chief Executive has been unable to put his plan in place due to the 1MDB scandal probe. 

Most specifically the bank was unable to carry out a major deal due to the scandal. in most cases, U.S regulators do not allow banks to conduct any business. 

With the matter settled, analysts are expecting Goldman Sachs to be more aggressive since it’s beginning on a clean slate. Marty Mosby an analyst at Vining Sparks commented on Goldman’s way forward. According to Mosby: 

“Getting this overhang off the back of management and the company, in general, is a very big win.  When they had this over their heads they didn’t have that opportunity, they had to take a pause. This is a green light to say they can go ahead and do that.”

Additionally, Goldman Sachs’s share price might receive a major boost after months of being under pressure. The fine will also be added to the Finbold Bank Fines Report 2020.

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Jeremy Wilson
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Jeremy is a content crafter and has experience in writing about finances and digital assets for over 5 years. At Finbold.com he covers news related to finance, regulations, startups and cybersecurity on a daily basis.

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each valued between $8-$1600!
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