Goldman Sachs officials have reached a $79.5 million deal to settle shareholder claims in the Malaysian sovereign wealth fund 1MDB scandal.
US prosecutors have said Goldman Sachs helped 1MDB arrange $6.5 billion of bond sales, but that $4.5 billion was diverted via bribes and kickbacks to government officials, bankers and others.
A preliminary settlement of the so-called shareholder derivative lawsuit in the 1MDB Scandal was filed in Manhattan federal court on Friday, and has to be signed off by US District Judge Vernon Broderick.
Shareholders led by the Atlanta-based Fulton County Employees’ Retirement System sought to hold Goldman Sachs Chief Executive David Solomon, his predecessor Lloyd Blankfein and others responsible for “conscious disregard of their oversight obligations” as the bank missed “red flags” of the 1MDB Scandal.
None of the defendants admitted wrongdoing or liability in agreeing to settle. Goldman spokeswoman Maeve DuVally declined to comment.
The bank previously agreed to pay billions of dollars to authorities in the United States and other countries over the 1MDB Scandal, and in 2020 entered a three-year deferred prosecution agreement with the US Department of Justice.
On April 8, former Goldman banker Roger Ng was convicted in Brooklyn, New York on bribery and money laundering charges over his role in the 1MDB Scandal.
Led by the firm Saxena White, the shareholders’ lawyers called the $79.5 million payout “an outstanding recovery for the company,” and the second-largest shareholder derivative settlement in the federal court circuit that includes New York.
The lawyers plan to seek fees of up to 25% of the settlement amount, or about $19.9 million, which Goldman would pay.
The case is Fulton County Employees’ Retirement System v Blankfein et al, U.S. District Court, Southern District of New York, No. 19-01562.
- Reuters with additional editing by Sean Omeara