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$3.9 billion settlement between Goldman Sachs and the Malaysian government

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
A sketchy scheme made Goldman Sachs pay

Big day today for Goldman Sachs and the Government of Malaysia, as they settled outside the court, the conflict regarding the criminal and regulatory proceedings concerning 1 Malaysia Development Berhad (1MDB). 

Back in 2018, the Malaysian prosecutors filed charges against three Goldman Sachs units for misleading investors over $6.5 billion worth of bond sales, which was meant to fund the sovereign wealth fund 1MDB. 

Goldman Sachs pleaded not guilty and denied any wrongdoing. From the group's point of view, various Malaysian government members and 1MDB lied about the future use of proceeds obtained from bond sales. According to both sides, roughly $4.5 billion got stolen from 1 Malaysia Development Berhad. The scheme involved the former prime minister of Malaysia – Datuk Seri Najib Razak and Goldman Sachs, and other culprits.

Goldman Sachs and the Malaysian government reached an “in-principle agreement” and settled for $3.9 billion that must be paid by the American group. Moreover, Goldman agreed to help the government to appoint an asset recovery specialist. However, the settlement doesn’t resolve other governmental and regulatory investigations that involve 1MDB. 

Today, the stock price increased by 0.2%. This year, Goldman Sachs lost 11.7%, while USA30 slipped 6.6%.

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Sources: malaymail.com, marketwatch.com


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.