Goldman Sachs to pay record $2.3bn foreign bribery penalty in the US

Fine reflects bank’s role in the plundering of Malaysia’s 1MDB investment fund

The New York city headquarters of Goldman Sachs. Globally, the bank’s penalties will exceed $5 billion. Photograph: AFP via Getty

The New York city headquarters of Goldman Sachs. Globally, the bank’s penalties will exceed $5 billion. Photograph: AFP via Getty

 

Goldman Sachs will pay a record foreign bribery penalty in the US and will enter a guilty plea for the first time ever for its role in the plundering of Malaysia’s 1MDB investment fund.

Goldman admitted to wrongdoing but its parent company avoided conviction in a deal known as a deferred-prosecution agreement, according to a court proceeding in Brooklyn, New York, on Thursday. That designation is a win for Goldman Sachs, because a conviction might have risked losing some institutional clients that are restricted from working with financial firms with criminal records.

The bank will pay more than $2.3 billion (€1.95 million) in a fine in the plea deal, US prosecutor Alixandra Smith said, the largest such penalty in US history. In all, Goldman’s penalties will exceed $5 billion globally.

The deal, which was expected, concludes one of the biggest bank investigations inherited by the Trump administration. It holds Goldman Sachs to account for its role in raising $6.5 billion for 1MDB, much of which US authorities say was stolen by people connected to the country’s former prime minister and diverted into high-end art and real estate, a super yacht and the Hollywood movie The Wolf of Wall Street. – Bloomberg