Goldman Sachs & 1MBD

November 30, 2018 6:22 am Published by Leave your thoughts

1MBD Right now, Goldman Sachs is being investigated for involvement in structuring a deal worth over $6 billion with 1MDB (1Malaysia Development Bhd.). 1MBD was a development arm of the Malaysian government, but no longer exists. SE Asian Goldman Executive, Tim Leissner, is accused of bypassing internal controls to the raise funds for 1MBD head, Low Taek Jho. Malaysian officials received kickbacks in return for granting clearance to the firm.

THE FCPA The Foreign Corrupt Practices Act “prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business.” The US Federal Reserve investigates and identifies suspected corruption and the SEC (Securities and Exchange Commission) and the Department of Justice enforces the laws for both civil and criminal cases. SEC.GOV

ANTI-BRIBERY LAWS One of the primary objectives added to the anti-bribery, AML (anti-money laundering) efforts by the federal government when it comes to banking is the requirement that companies have standardized policies practices in places to prevent ill-attained funds from slipping through. The policies are backed within the organizational structure by procedures, audits, and an anti-corruption officer. The compliance officer has the sole duty is to ensure all employees are trained on best practices and tested companywide. Further, the compliance officer must conduct an annual review of the policy and existing procedures and be subject to audit by a third party.

PENALITIES Someone higher-up may have figured out a way to bypass compliance reviews to get the deal for 1MBD structured and approved… Leissner was ordered to forfeit $47.3 million in wealth for conspiring to launder money in Malaysia and the UAE (United Arab Emirates) but claimed the actions he took to secure those deals were not unique to the bank. Bloomberg

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This post was written by Daniel Jones

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