Goldman Sachs Group Inc. agreed to a $79.5 million settlement with shareholders who blamed lax oversight by the bank for its involvement in the 1 MDB bribery scandal.
According to a pension fund that sued the company and its executives on behalf of shareholders, the money will be used to pay for compliance activities at the bank, including enhanced internal controls and accounting and the running of a rigorous anti-corruption compliance program.
The settlement will be paid by insurers for Lloyd Blankfein, Goldman's former chief executive, David Solomon, its current chief executive, and ten other current and former bank executives, according to court papers filed Friday in federal court in Manhattan.
The settlement must be approved by the court, and neither Goldman nor the executives admitted to any blame.
The 1 MDB scandal has cost the bank more than $5 billion, including $2.9 billion paid to US regulators.
In 2012, Goldman issued $6.5 billion worth of bonds to 1 MDB, a Malaysian development company. The bonds were earmarked for redevelopment but all but $2 billion of the money was diverted to pay bribes to government officials, federal prosecutors said.
In 2020, a Goldman unit admitted to conspiring to violate U.S. anti-bribery laws. It was the first guilty plea for the 153-year-old firm.
The settlement was reached Friday and agreed to by all parties, according to lawyers for the pension fund.
The case is Fulton County Employees Retirement System v. Blankfein, 19 cv-01562, US District Court, Southern District of New York Manhattan None What Happened When a Wall Street Investment Giant moved to Nashville
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