Malaysia has filed charges against Goldman Sachs and two of its former employees for their role in the multibillion dollar corruption scheme known as the 1MDB scandal.
Attorney General Tommy Thomas said the US investment bank and the individuals were responsible for “grave violations” of Malaysia’s securities laws, including making false and misleading statements to investors.
Malaysian and US prosecutors alleged that Goldman Sachs, which organised bond sales totalling $6.5 billion, played a role in helping the administrators of the 1MDB state investment fund siphon billions of dollars. A total of $2.7 billion was allegedly misappropriated from the bond issuances.
Thomas said his office is seeking several billions of dollars in fine for the firm as well as prison sentences of up to 10 years for ex-bankers Tim Leissner and Ng Chong Hwa.
The bank has denied any wrongdoing in the case.
“We believe these charges are misdirected, will vigorously defend them and look forward to the opportunity to present our case,” said Goldman Sachs spokesman Edward Naylor in a statement.
“The firm continues to cooperate with all authorities investigating these matters.”
The 1MDB fund, set up in 2009, was created by former Prime Minister Najib Razak to supposedly promote global investment in Malaysia. After his election defeat in May, Najib is facing charges of money laundering, bribery and criminal breach of trust.