Malaysia charges 17 Goldman Sachs executives

THE SURPRISE stung. On August 9th Malaysia’s attorney-general filed criminal charges against 17 current and former executives at Goldman Sachs, an investment bank. The move marks an escalation in Malaysia’s efforts to deal with a scandal uncovered at 1MDB, a state investment vehicle set up more than a decade ago by Najib Razak, then Malaysia’s prime minister. As much as $4.5bn of public money vanished from the fund between 2009 and 2015, according to America’s Department of Justice (DOJ). The cash was funnelled through shell companies around the world and frittered away on yachts, artworks, diamonds and other fripperies. Investigations have spanned America, Luxembourg, Malaysia, Singapore, Switzerland and the United Arab Emirates.

The 17 executives occupied senior positions at three subsidiaries of Goldman between May 2012 and March 2013. Five still work at the bank: among them is Richard Gnodde, the chief executive of its London-based subsidiary. During that time Goldman underwrote three bond offerings that raised $6.5bn for 1MDB, of which, according to the DOJ, $2.7bn later disappeared. Even so, the bank earned a whopping $600m in fees—a figure that Malaysia’s authorities claim was above the market rate. In 2013 one of the bank’s former executives, who has been charged, was paid a bonus exceeding that of its chief executive at the...

via The Economist: Finance and economics Business Feeds

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