Goldman Sachs officials reached $79.5 million in shareholder settlement over 1 MDB scandal NEW YORK - Goldman Sachs Group Inc employees and directors reached a $79.5 million settlement to resolve shareholder claims that their poor oversight contributed to the bank being enmeshed in the looting scandal at Malaysia's 1 MDB sovereign wealth fund.
A preliminary settlement of the so-called shareholder derivatives lawsuit was filed in Manhattan federal court on Friday and requires approval from U.S. District Judge Vernon Broderick.
The defendants' insurers would pay $79.5 million to Goldman, which would apply it toward compliance and governance measures, including giving more power to its chief compliance officer and creating an anonymous hotline for employee tips.
U.S. prosecutors say Goldman helped 1 MDB arrange $6.5 billion of bond sales, but that $4.5 billion was diverted via bribes and kickbacks to government officials, bankers and others.
Shareholders led by the Atlanta-based Fulton County Employees' Retirement System tried to hold Goldman Chief Executive David Solomon, his predecessor Lloyd Blankfein and others responsible for their disregard of their oversight obligations as the bank missed red flags of the fraud.
No of the defendants admitted wrongdoing or liability in agreeing to settle. Goldman spokeswoman Maeve DuVally didn't want to say anything.
The bank previously agreed to pay billions of dollars to authorities in the United States and other countries over 1 MDB, and entered a three-year deferred prosecution agreement with the U.S. Department of Justice in 2020.
On April 8, former Goldman banker Roger Ng was convicted in Brooklyn, New York on bribery and money laundering charges over his role in the scandal.
The shareholders' lawyers called the $79.5 million settlement an outstanding recovery for the company, and the second-largest shareholder derivative settlement in the federal court circuit that includes New York, led by the firm Saxena White.
The lawyers plan to seek fees of up to 25% of the settlement amount, or about $19.9 million, which Goldman would pay.
The case is Fulton County Employees Retirement System v Blankfein et al, U.S. District Court, Southern District of New York, No.