Security & Fraud

Goldman Sued Over 1MBD Scandal

Goldman Sachs is being sued by an Abu Dhabi sovereign wealth fund over what is being termed the Malaysian 1MDB scandal. The suit was filed in New York, reported the Financial Times (FT), on behalf of the International Petroleum Investment Company (IPIC) and seeks unspecified damages from Goldman and individuals, such as Tim Leissner, a former partner at the bank who has pleaded guilty to conspiracy charges.

In the suit, which alleged that Goldman bribed IPIC officials in a “massive global conspiracy,” FT noted, Malaysian government officials have been accused of bilking $4.5 billion from 1MDB, a government fund. Among those charged is Former Prime Minister Najib Razak, as well as government officials and executives in far-flung corners of the globe.

IPIC, said FT, alleged that Goldman bribed Khadem al-Qubaisi, IPIC’s former managing director, and Mohamed al-Husseiny, former chief executive of Aabar, an IPIC subsidiary. The duo acted against the fund’s interests, according to the suit, as part of “a massive, international conspiracy to embezzle billions of dollars” from 1MDB. The executives were said to have misused IPIC, and the Aabar infrastructure and name, to aid the embezzlement. IPIC said it also filed complaints in Abu Dhabi against Qubaisi and Husseiny.

Goldman said it had no knowledge of the schemes, which helped siphon $2.7 billion from 1MDB. The bank had helped 1MDB raise $6 billion in 2012 and 2013. Goldman also said, according to FT, it is still “in the process of assessing the details” of the lawsuit filed by IPIC, and expects to contest the suit “vigorously.”

In the past month, Goldman has seen its shares fall as much as 14 percent, as investors remain concerned about the impact to the bank’s reputation and possible financial implications, said FT.

——————————

LIVE PYMNTS ROUNDTABLE: MODERNIZING & SCALING FOR THE NEW NORMAL

The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

TRENDING RIGHT NOW