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Goldman Sachs bankers cut wages by $ 174 million following 1MD scandal Business

Goldman Sachs slashes the salaries of top officials, including boss David Solomon and EU chief Richard Gnodde, by $ 31million (£ 24million) after being fined by regulators around the world over ‘a massive fraud against the Malaysian 1MDB fund.

Bank must pay US authorities nearly $ 3 billion for its role in the scandal, in which billions of dollars of public money was stolen by Kuala Lumpur’s elite and spent on a superyacht, a painting by Picasso , celebrity parties and luxury fashion.

Goldman also admitted that its Malaysian subsidiary bribed officials with more than $ 1 billion so it could win a lucrative deal to help 1MDB issue more than $ 6 billion in bonds.

The Justice Department said that for five years Goldman “had participated in a broad international corruption program, conspiring to obtain more than $ 1.6 billion in bribes from several senior officials in several countries. so that the company can reap hundreds of millions of dollars in bribes, dollars in fees, all to the detriment of the Malaysian people and the reputations of US financial institutions operating overseas. ”

The bank has now slashed the salaries of London-based Mr Gnodde and Mr Solomon – who are getting noticed as DJs and who last month sold their holiday home in the US ski resort of Aspen for $ 26.5 million – plus CFO Stephen Scherr and Chief Operating Officer John Waldron.

Goldman added that five former major bankers, including former CEO Lloyd Blankfein, would lose part of their performance-linked stock awards worth $ 67 million.

The bank is also asking $ 76 million from three former employees involved in the criminal scheme – Tim Leissner, who pleaded guilty to criminal charges; Ng Chong Hwa, who was charged with the same crimes; and Andrea Vella, who was banned by the Federal Reserve from participating in the banking sector.

Mr. Solomon said, “We need to recognize the shortcomings of our business.

“While many good people have worked on these deals and tried to do the right thing, we recognize that we have not sufficiently responded to the red flags and looked at the representations of some members of the deal team. ”

1MDB was created to fund infrastructure projects in Malaysia and turn Kuala Lumpur into an Asian financial center, but instead huge sums were plundered to buy luxury items. The money was even pumped into the Hollywood movie The Wolf of Wall Street, which stars Leonardo DiCaprio as a corrupt trader.

Goldman Sachs International has also been fined £ 96.6million by UK regulators for risk management failures related to the 1MDB scandal, while its Asian unit has been fined $ 350million by the Hong Kong financial regulator. He was fined $ 122 million in Singapore.

The Wall Street bank had already agreed to pay the Malaysian authorities $ 3.9 billion in July for its role in the Malaysian sovereign wealth fund scandal 1MDB in 2013. Malaysia has dropped criminal proceedings against the bank and some of its executives last month.

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Source: www.telegraph.co.uk
This notice was published: 2020-10-22 16:16:34