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Goldman Sachs said it has sued the Malaysian government over controversial payments that the Wall Street bank argued were not considered part of its 2020 settlement of the 1MDB money laundering scandal.
The complaint marks the latest chapter in Goldman’s role in a multibillion-dollar corruption scheme involving Malaysia’s state investment fund 1MDB, one of the largest financial crimes ever committed and the most painful experience in Goldman’s recent history .
“Today, we initiated arbitration against the Malaysian government alleging breach of Goldman’s obligations under the settlement agreement to secure appropriate credit assets and to recover other assets,” Goldman Sachs said in a statement.
Goldman Sachs filed a lawsuit with the London Court of International Arbitration, according to a person familiar with the matter.
At the heart of the dispute is a settlement reached by Goldman Sachs in 2020, under which it paid $2.5 billion to the Malaysian government for its role in the 1MDB scandal.
Goldman Sachs also agreed to transfer at least US$500 million in 1MDB-related assets by August 2022 or face another US$250 million in fines. Goldman Sachs and Malaysia are at odds over whether the bank offered the assets.
Malaysian Prime Minister Anwar Ibrahim said publicly this year that Goldman Sachs needed to honor the settlement. In August, he told CNBC that his administration had not ruled out filing a lawsuit against the bank.
Representatives of the Malaysian government could not immediately be reached for comment late Wednesday. Bloomberg first reported the complaint.
US authorities claim $4.5 billion was misused and spent on luxury real estate, expensive jewelry and finance around the world wolf of wall streetan Oscar-nominated film about financial wrongdoing and more.
Malaysian financier Jho Low is accused of being the mastermind of the scheme, but U.S. officials say Goldman Sachs played a key role and should have spotted warning signs that would have prevented at least some of the funds from being stolen.
Former Goldman Sachs banker Roger Ng was sentenced to 10 years in prison this year for his role in the 1MDB case. Former Goldman Sachs partner Tim Leissner also pleaded guilty to violating foreign bribery laws and conspiracy to launder money in connection with 1MDB. His sentencing is scheduled for March 2024.
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