Goldman's Solomon Says He Feels ‘Horrible’ About 1MDB Breaches - EcoFinBiz Blog

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Goldman's Solomon Says He Feels ‘Horrible’ About 1MDB Breaches

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(Bloomberg) -- Goldman Sachs Group Inc. Chief Executive Officer David Solomon said he felt “horrible” about the role former bank employees played in the scandal surrounding Malaysia’s 1MDB fund.

At least three Goldman bankers were implicated by the U.S. Department of Justice in a multiyear criminal enterprise that included bribing officials in Malaysia and elsewhere and laundering hundreds of millions of dollars. In one of his first major headaches as CEO, Solomon will have to wrestle with the fallout from the firm’s growing entanglement in the high-profile corruption probe.

“It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law,” Solomon said in a Bloomberg Television interview Wednesday at the New Economy Forum in Singapore. “We take the matter extremely seriously and we continue to work with the authorities as they investigate it.”

Goldman has been under scrutiny for years for its role in raising $6.5 billion for 1Malaysia Development Bhd. -- and for the nearly $600 million in fees it earned from the bonds. 1MDB is at the center of a global scandal involving claims of embezzlement and money laundering, which have triggered investigations in the U.S., Singapore, Switzerland and beyond.

Read more: A QuickTake on the 1MDB deals that haunt Goldman

Court documents unsealed on Thursday said an unidentified Goldman official in Asia conspired with former Goldman bankers Tim Leissner, Roger Ng and Malaysian financier Low Taek Jho, and had knowledge that bribes were being paid. Prosecutors’ description of the official lines up with that of Andrea Vella, Goldman’s former co-head of investment banking who was placed on leave later that day.

Goldman has previously said it believed the money it was raising for 1MDB would be used for development projects. A bank spokesman said last week that it’s cooperating with authorities, and declined to comment further.

The New Economy Forum is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.

--With assistance from Benjamin Robertson.

To contact the reporters on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net;Erik Schatzker in New York at eschatzker@bloomberg.net

To contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Russell Ward

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