October 24, 2020

Global financial group agrees to pay $2.9 billion to settle FCPA claims

On October 22, 2020, the Goldman Sachs Group Inc. (the “Company”), a New York-based global financial institution, and its Malaysian subsidiary, Goldman Sachs (Malaysia) Sdn. Bhd. (GS Malaysia), agreed to pay over $2.9 billion to settle a coordinated global resolution with enforcement authorities in the US, UK, Singapore, and Hong Kong, in connection with allegations that the entities had violated the anti-bribery and accounting provisions of the US Foreign Corrupt Practices Act and other similar U.S. and foreign laws.
According to the settlement papers, between approximately 2009 and 2014, the Company engaged in an alleged scheme to pay over $1.6 billion in bribes to foreign government officials, including officials from the Malaysian government, Malaysian state-owned investment fund 1Malaysia Development Berhad (1MDB), and two of Abu Dhabi’s state-owned investment companies (the International Petroleum Investment Company and Aabar Investments PJS). 
As part of its October 22 global resolution, the Company entered into a  Deferred Prosecution Agreement (DPA) with the US Department of Justice (DOJ), under which it agreed to pay $2.9 billion in fines and disgorgement, and agreed to a three-year reporting requirement, to resolve allegations that it had conspired to violate the FCPA’s anti-bribery provisions.  The Company was not required to engage a monitor.  The Company received partial credit from the DOJ for its cooperation and remediation, but did not receive full credit because it had failed to disclose the misconduct and because it had delayed providing the DOJ with certain evidence during the investigation.  The DOJ stated that it would credit $1.6 billion of the $2.9 penalty against payments made to other enforcement agencies in connection with the global resolution.  
These other resolutions include a $400 million civil penalty in connection with an administrative resolution with the US Securities and Exchange Commission to resolve allegations that the firm had violated the FCPA’s anti-bribery and accounting provisions, and payments of $154 million to the Board of Governors of the Federal Reserve System, $150 million to the New York State Department of Financial Services, $126 million to the UK’s Financial Conduct Authority and Prudential Regulation Authority, $122 million to Singaporean authorities, $350 million to the Hong Kong Securities and Futures Commission, and $606 million to the Malaysian government, to resolve similar allegations. 

DOJ Press Release | SEC Press Release | FCA Press Release | Goldman Sachs Statement