HONG KONG – Hong Kong’s securities regulator has fined Goldman Sachs’s Asia subsidiary US$350 million (RM1.45 billion) for “serious lapses and deficiencies” in risk compliance and money laundering controls in relation to 1Malaysia Development Berhad.
Hong Kong’s Securities and Futures Commission (SFC) said in a statement today that it had fined Goldman Sachs Asia the said sum for “serious lapses and deficiencies in its management supervisory, risk, compliance and anti-money laundering controls that contributed to the misappropriation of US$2.6 billion” from funds raised across three bond offerings in 2012 and 2013.
The fine is the first of more than US$2 billion of new penalties set to be announced today as regulators from the US to Singapore penalise Goldman for its role in the looting of billions that was raised for 1MDB and siphoned off in a sprawling money laundering and bribery scandal.
Goldman’s Asia business “lacked adequate controls in place to monitor staff and detect misconduct in its day-to-day operation, and allowed the 1MDB bond offerings to proceed when numerous red flags surrounding the offerings had not been properly scrutinised”, SFC said.
“The penalty in this case – assessed solely in accordance with Hong Kong’s own fining framework – reflects our findings that Goldman Sachs Asia failed to deal properly with numerous suspicious circumstances surrounding the 1MDB bond offerings. These failures led to multiple, serious breaches of the rules which set out the high standards of behaviour expected of all firms supervised by the SFC,” said SFC chief executive officer Ashley Alder.
Goldman Sachs Asia, he added, “fell far short of the standards expected of a licensed intermediary in the 1MDB case and suffered not only reputational damage from its own failures, but also brought the securities industry into disrepute.” – The Vibes, October 22, 2020
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