Goldman Sachs Group Inc. (“Goldman Sachs” or “Goldman”), a global banking behemoth, was finally struck with financial penalties of $3.3 billion due to its participation in a Malaysian bribery scheme. The Bank admitted to paying more than $1.6 million in bribes to prominent government officials to obtain lucrative business from 1 Malaysia Development Berhad (“1MDB”), a Malaysian owned sovereign wealth fund. In exchange for the bribes, Goldman became the lead adviser on energy acquisitions and underwrote three bond offerings for approximately $6.5 billion, earning the Bank hundreds of millions in revenue. Goldman admitted that there were red flags surrounding the transactions, including “the [excessive] amount of money made from relatively plain bond deals” and the involvement of corrupt Malaysian financier, Jho Low. Yet somehow, they flew under Goldman’s radar even after purportedly comprehensive review by five internal committees. The fund’s shady business spurred investigations in the U.S., the U.K., Singapore, Malaysia and Hong Kong. Goldman’s Malaysian subsidiary, (“GS Malaysia”), has now pled guilty to conspiring to violate anti-bribery provisions in the Foreign Corrupt Practices Act (“FCPA”), and the parent company entered into a deferred prosecution agreement (“DPA”) with the Department of Justice, culminating in what has been referred to as the “largest monetary penalty ever assessed under corporate criminal bribery law.”
This post was originally published on the Cardozo International & Comparative Law Review website on November 17, 2020. The original post can be accessed via the Archived Link button above.
Feder, Adina, "Too Soft on Corporate Crime?" (2020). CICLR Online. 10.