Largest FCPA enforcement action of all-time against Goldman Sachs
Two years ago, in November 2018, the US Department of Justice (hereinafter “DOJ”) announced criminal charges against two former Goldman Sachs employees or paying bribes to several officials in Malaysian and in Abu Dhabiin violation of the Foreign Corrupt Practices Act (hereinafter “FCPA”). These activities were related to Malaysia’s state-owned and state-controlled investment development company 1Malaysia Development Berhad (hereinafter “1MDB”).
On 22 October 2020, the DOJ and the US Securities and Exchange Commission (hereinafter “SEC”) announced an USD 1.66 billion FCPA enforcement action against Goldman Sachs and a related entity. This represents the largest FCPA enforcement action of all-time. This FCPA enforcement involves a DOJ component in the amount of USD 1.263 billion and a SEC component of USD 400 million. In addition, the US Federal Reserve Board also announced that it fined Goldman Sachs in connection with the same core conduct in connection with 1MDB with USD 154 million for the firm’s failure to maintain appropriate oversight, internal controls and risk management. Furthermore, Goldman Sachs agreed in a coordinated resolution with criminal and civil authorities in the United Kingdom, Singapore and elsewhere, thereby increasing the total amount to be paid to more than USD 2.9 billion.
Even though Goldman Sachs employees intentionally circumvented Goldman Sachs controls in order to carry out their corruption activities, Goldman Sachs was nevertheless held liable because it “did not take reasonable steps to ensure that [the employees concerned were] not involved” in various deals and additionally because it “ignored or only nominally addressed” various red flags associated with certain deals, the DOJ announced in its press release.
Find the DOJ’s press release here: https://www.justice.gov/opa/pr/goldman-sachs-charged-foreign-bribery-case-and-agrees-pay-over-29-billion
And the SEC’s press release here: https://www.sec.gov/news/press-release/2020-265
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Thursday, 24 March 2022
Thursday, 23 March 2023