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Goldman Sachs Agrees to Largest Penalty Ever in 1MDB Scandal

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Key Points

  • Global financial titan Goldman Sachs agreed to pay $2.9 billion in penalties to settle criminal charges in the 1MDB Malaysian bribery scandal, the largest US fine ever in a corruption case, the Justice Department announced Thursday.
  • Goldman Sachs helped raise $6.5 billion for the Malaysian government’s sovereign wealth fund. The US Justice Department has said more than $4.5 billion was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015.
  • The guilty plea could curtail activities of Goldman Sachs Malaysia but allows the parent company to avoid admitting wrongdoing in court—which would have damaged its ability to do business.
  • Visit The Financial Today’s homepage for more stories.

NEW YORK — Global financial titan Goldman Sachs agreed to pay $2.9 billion in penalties to settle criminal charges in the 1MDB Malaysian bribery scandal, the largest US fine ever in a corruption case, the Justice Department announced Thursday.

Acting US Assistant Attorney General Brian C. Rabbitt said Goldman “accepted responsibility” in the case that involved $1.6 billion in bribes, the largest ever recorded, and massive gains laundered through the US financial system.

Goldman Sachs helped raise $6.5 billion for the Malaysian government’s sovereign wealth fund. The US Justice Department has said more than $4.5 billion was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015.

The investment fund “was looted by corrupt officials and their co-conspirators, including senior Goldman bankers” turning it “into a piggy bank for corrupt public officials and their cronies,” Rabbitt said at a press briefing.

In a first for Goldman Sachs, the company’s Malaysian unit pleaded guilty in a US court Thursday for violations of American bribery law as part of a deal to end the criminal probe in the sweeping case that involved authorities in nine countries.

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