KUALA LUMPUR – Two former Goldman Sachs top executives will face a suit filed by the investment bank’s shareholders over the 1Malaysia Development Bhd scandal after a New York judge refused to dismiss the legal action.
Former CEO Lloyd Blankfein and ex-chief operating officer Gary Cohn are being sued by shareholders who accuse them of misleading the lender on its work with 1MDB, reported Bloomberg.
United States district judge Vernon Broderick denied an application by Goldman Sachs, Blankfein and Cohn to dismiss the suit, but dropped former co-COO Harvey Schwartz from the case.
Broderick said the shareholders adequately alleged that several statements made by the bank and its top executives about the 1MDB case were false and misleading.
He pointed to Blankfein’s comment in a 2018 interview that he was “not aware” of any red flags and Cohn’s chairing of a committee that approved Goldman’s deals with the Malaysian investor.
“Taking these allegations as true, I find it unlikely that Blankfein would not have been aware of any warning signs about 1MDB prior to the scandal breaking.”
Among the shareholders, Swedish pension fund Sjunde AP-Fonden sued Goldman Sachs in late 2018, but the bank denied culpability and blamed former partner Tim Leissner, who has pleaded guilty.
The bank has been accused of arranging some US$6.5 billion (RM26.96 billion) in bond sales for 1MDB. – The Vibes, June 29, 2021
