Ex-Goldman Banker Barred by SEC Over Role in 1MDB Scandal Tim Leissner consented to the SEC’s finding that he violated federal securities laws, according to an announcement from the commission. Alicia McElhaney December 16, 2019 Goldman Sachs offices in Kuala Lumpur, Malaysia. (NadirahZakariya/Bloomberg) The U.S. Securities and Exchange Commission has barred a former Goldman Sachs managing director from the securities industry after finding that he bribed high-ranking officials in Malaysia and Abu Dhabi. The SEC on Monday announced charges against Tim Leissner for his involvement in an alleged bribery scheme that allowed Goldman to obtain business from Malaysia’s sovereign wealth fund, 1Malaysia Development Berhad, including underwriting $6.5 billion in bond offerings. According to the announcement, Leissner received more than $43 million in “illicit payments” for his role in facilitating the alleged scheme. “Individual conduct lies at the heart of all bribery schemes,” Charles Cain, chief of the SEC Enforcement Division’s FCPA unit, said in a statement. “Here, Leissner abused his leadership role at Goldman Sachs by engaging in a massive bribery scheme targeting the highest levels of two foreign governments in order to bring in lucrative business to the firm and enrich himself.” The SEC said that Leissner consented to its order, which found that he violated the anti-bribery, internal accounting controls, and books and records provisions of federal securities laws. The former Goldman managing director also agreed to be permanently barred from the securities industry. Video: Economist Perspective: Battle of the Yield Curves[/paste:font] According to the announcement, the SEC is requiring Leissner to pay disgorgement of $43.7 million. This will be offset by anything he paid previously as a part of a resolution from parallel criminal action by the U.S. Department of Justice. “As we have previously said, Leissner has admitted to lying and deceiving the firm as part of his crimes,” a spokeswoman for Goldman Sachs said via email Monday. [IIDeep Dive:Fed Bans Former Goldman Bankers Over Malaysian Fund Scandal] The SEC order follows an earlier decision by the U.S. Federal Reserve, which in March announced that it had banned Leissner from the banking industry for his role in the 1MDB scandal. Leissner pleaded guilty to charges of conspiring to launder money and to violations of the Foreign Corrupt Practices in August 2018. He is set to be sentenced in June 2020, the court docket shows. Leissner’s lawyer, Robert O’Neill of Freeh, Sporkin & Sullivan LLP, did not return a phone call and an email seeking comment. https://www.institutionalinvestor.com/article/b1jh7bc0z8gzm1/Ex-Goldman-Banker-Barred-by-SEC-Over-Role-in-1MDB-Scandal?utm_medium=email&utm_campaign=The Essential II 12172019&utm_content=The Essential II 12172019 Version A CID_07882659c8d3ebf767161faffa651e9f&utm_source=CampaignMonitorEmail&utm_term=Ex-Goldman Banker Barred by SEC Over Role in 1MDB Scandal
The US has returned a substantial amount of forfeited funds, related to 1MDB, to Malaysia. I wonder whether Leisnner’s fine will also be transferred to Malaysia.
Goldman Sachs in talks with US to admit guilt, pay $2B in 1MDB scandal By Reuters December 19, 2019 | 10:56am Enlarge Image Jho Low Getty Images More On: goldman sachs Goldman's WeWork bailout loan matches size of Adam Neumann's exit package Goldman Sachs may get $2B fine over star-studded 1MBD fraud: report E-Trade unlikely to be acquired after Schwab buys TD Ameritrade Goldman chiefs comment on Buffalo Wild Wings insider trading arrest Goldman Sachs Group Inc is in talks with the US government and a state regulator to possibly pay up to $2 billion and admit guilt to resolve investigations into its role in a Malaysia corruption scandal, according to a source familiar with the matter. The bank and US officials have discussed a deal in which a Goldman subsidiary in Asia would plead guilty to violating US bribery laws, the Wall Street Journal first reported on Thursday. The discussions could also involve Goldman installing an independent monitor to oversee and recommend changes to its compliance procedures. Involved in the discussions are three federal regulators – the US Department of Justice, Securities and Exchange Commission and the Federal Reserve – and New York’s Department of Financial Services, according to the source. In a statement, the bank said that settlement talks are ongoing and it continues to cooperate with regulators. The SEC declined to comment. Representatives for the other regulators did not immediately respond to requests for comment. A settlement could be announced in late January, sources familiar with negotiations said. The government of former Malaysian Prime Minister Najib Razak set up the 1MDB fund in 2009, and the US Justice Department estimated $4.5 billion was misappropriated by high-level fund officials and their associates between 2009 and 2014. Goldman has been investigated by regulators in at least 14 countries, including the United States, Malaysia, Singapore and others, for its underwriting role and what it did and did not know at the time of the transactions. In November 2018, the US Justice Department filed criminal charges against two former Goldman Sachs bankers tied to the scandal, Tim Leissner and Roger Ng. According to the Justice Department, Goldman earned $600 million in fees for its work with 1MDB. Leissner, Ng and others received large bonuses in connection with that revenue. The bank has consistently tried to distance itself from the scandal, saying Leissner and Ng worked to conceal their criminal activities from bank management. Leissner pleaded guilty to the charges last year. Ng pleaded not guilty to charges in May, and his case is currently pending in federal court in Brooklyn. Spokespeople for Malaysian Prime Minister Mahathir Mohamad and the attorney general of Malaysia did not immediately respond to requests for comment. https://nypost.com/2019/12/19/goldman-sachs-in-talks-with-us-to-admit-guilt-pay-2b-in-1mdb-scandal/
1MDB verdict Former Malaysian Prime Minister Najib Razak has been found guilty of corruption for his role in the theft of billions of dollars from the 1MDB sovereign wealth fund. Najib, the first Malaysian premier to be convicted of graft, now faces decades behind bars, along with fines–if it weren't for the fact that he is 67-years-old, he would be whipped, too. Further cases related to the scandal still loom, but Goldman Sachs last week reached a $3.9 billion settlement with the government over its role. Al Jazeera
This was the verdict of the first case, which handled about small money (only 10 MUSD diverted). The large cases, about the majority of the diverted/disappeared funds, have yet to be handled by the court. And this first conviction will be challenged in an appeal. So things are far from over: it will take multiple more years.