Categories Finance, U.S. Markets News

Goldman Sachs defends 1MDB fraud charges, passes buck to ‘rogue’ staff

Giving a new twist to the controversy surrounding its involvement in the infamous 1Malaysia Development Berhad scandal, Goldman Sachs (GS) this week came up with an unexpected defense. The investment bank claimed it was dragged into the multibillion-dollar misappropriation due to the rogue behavior of a few employees.

It seems Wall Street is not convinced by the explanation and the company’s stock remained in the red on Thursday, unable to recover from the plunge that followed the Malaysian finance minister’s demand for refund of the fees paid for the 1MDB deals.

Expressing “outrage” over the way things unfolded after the scandal came to the fore, Goldman CEO David Solomon in a communiqué to employees said the company and its management were not directly involved in the fraud in any way. “This isn’t us,” he said.

The investment bank claimed it was dragged into the multibillion-dollar misappropriation due to the rogue behavior of a few employees

There has been intense speculation among the investment community about the impact of the allegations on the company’s outlook, with some predicting a major financial burden from the litigation. Meanwhile, allaying investors’ concerns, Solomon claimed that Goldman’s outlook remained intact.

If proven otherwise, the regulators could slap a huge fine on the bank, to the tune of up to $2 billion. Besides suffering significant costs related to the case in the coming quarters, the company will have to take steps to the repair its faltering reputation. Recently, the management had also hinted at the probability of the company incurring a major fine in connection with the case.

Goldman Sachs’ solid Q3 results beat estimates; stock gets a lift

Earlier, the company’s Southeast Asia former head Tim Leissner admitted to having paid kickbacks to Malaysian officials to secure bond deals.

Goldman shares slipped to a two-year low Thursday, extending the losing streak that began earlier this month. The stock lost about 15% over the past twelve months and 21% since the beginning of the year.

 

Get access to timely and accurate verbatim transcripts that are published within hours of the event

Most Popular

United Parcel Service (UPS) seems on track to regain lost strength

Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic

IPO Alert: What to look for when Boundless Bio goes public

Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.

Nike (NKE) bets on innovation and partnerships to return to high growth

Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top