FOR A FREE, PRINTABLE VERSION, CLICK HERE.
Goldman Sachs Pays Billions for Bribery Scheme
Goldman Sachs, one of the most powerful banks on Wall Street, is involved in a major scheme involving bribes to foreign officials. The bank admitted to criminal wrongdoing by its Malaysian subsidiary. The bribe netted $600 million in fees, but, will result in more than $5 billion in penalties to regulators globally. Goldman Sachs agreed to $2.9 billion in U.S. fines after admitting that two former executives agreed to pay $1.6 billion in bribes to secure business. The settlement was the largest ever paid to the U.S. government in a foreign criminal bribery case. In addition, Goldman agreed to a $3.9 billion settlement with the Malaysian government.
The Justice Department said Goldman Sachs ignored many of the 'red flags' related to the bribery. Malaysia operated a government fund to improve the county's economy and overseers of the fund embezzled $4 billion. Goldman was arranging bonds for the fund manager. The embezzlers (a fund advisor) used the money to buy real estate in Beverly Hills, California and New York. Other purchases included yachts, a jet, opulent jewelry, a clear acrylic grand piano given to a supermodel as a gift, and artwork by Vincent Van Gogh and Claude Monet. Also, part of the money was used to cover gambling debts in Las Vegas and even helped finance the movie "The Wolf of Wall Street." The bank received a deferred prosecution agreement which allows the firm to operate as usual and is like an 'unofficial probation.' The penalty could have involved independent monitoring to oversee ethics and compliance operations and behaviors. Some observers thought the settlement was highly favorable towards Goldman Sachs.
© Daniels Fund 2020. All rights reserved.