In July 2020, Goldman Sachs settled with the Malaysian government, agreeing to pay fines that will total USD 3.9 billion in order to absolve the bank of all other criminal charges. The settlement includes USD 2.5 billion in a payment directly to the Malaysian government and another USD 1.4 billion from assets seized by governments around the world (meaning those funds won’t come directly from Goldman). In mid-October, 1MDB pled guilty and agreed to pay USD 2.9 billion to the United States and announced that Goldman will recoup or withhold USD 174 million in compensation awarded to bank executives. After each settlement, stock in Goldman Sachs went up.
Dennis M. Kelleher of Better Markets, a Wall Street watchdog, claims the settlement is “virtually meaningless” and that a more serious penalty would be the appointment of an independent monitor of the bank’s compliance procedures. He also suggests that a guilty plea by the bank itself would be more fitting, as opposed to one from its Malaysian subsidiary.
Then answer the questions below.
In your initial response to the topic you have to answer all questions:
Do you think the punitive fines the courts are ordering Goldman Sachs to pay are sufficient to make up for the wrongdoing?
Do you think Goldman Sachs ought to be held more directly accountable for its role in the 1MDB corruption scandal?
This isn’t the first corruption scandal Goldman Sachs has been involved in. How do you think the bank should move forward in regaining public trust?
Reflection – include a paragraph in the initial response in their own words, using finance terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life.
