Goldman Sachs Subpoenaed by U.S. Agencies for Documents Related to 1MDB
July 29 2016 - 8:49PM
Dow Jones News
By Justin Baer
U.S. authorities have issued subpoenas to Goldman Sachs Group
Inc. for documents related to the bank's dealings with a Malaysian
investment fund at the center of an international corruption
scandal, a person familiar with the matter said.
Goldman received the requests for information earlier this year
from the U.S. Justice Department and the Securities and Exchange
Commission, the person said. Investigators have also subpoenaed a
Goldman banker who worked closely with the Malaysian fund, The Wall
Street Journal reported in March.
Under the subpoenas, Goldman is providing documents to the
investigators, the person said.
The authorities also want to interview current and former
Goldman employees in connection with the inquiries, though by
Friday none of those meetings had occurred, people familiar with
the matter said.
Goldman Sachs is also providing information to the Monetary
Authority of Singapore, the city-state's central bank and financial
regulator that also has inquired about the firm's work for the fund
in question -- 1Malaysia Development Bhd., or 1MDB, the person
said.
The Justice Department and the SEC, along with the New York
State Department of Financial Services are looking into Goldman's
role in a series of bond sales it managed for 1MDB, the Journal has
reported, citing people familiar with the matter.
Some $2.5 billion of the proceeds from those offerings was
diverted from the fund to shell companies controlled by influential
figures in Malaysia and Abu Dhabi, the Justice Department alleged
last week in lawsuits seeking to seize some of those assets.
1MDB on Tuesday said its "board remains confident that no
wrongdoing has been committed by 1MDB and that the past audited
financial statements continue to show a true and fair view of the
company's affairs at the relevant points in time."
New York-based Goldman said last week that it had "no visibility
into whether some of those funds may have been subsequently
diverted to other purposes."
U.S. investigators are seeking to determine whether Goldman
broke the law when it didn't sound an alarm after some of the
proceeds disappeared offshore, The Wall Street Journal reported
last month.
Tim Leissner, Goldman's top banker in Southeast Asia and a close
adviser to 1MDB until his resignation from the firm in early 2016,
was also subpoenaed by the Justice Department, the Journal has
reported. Mr. Leissner, through a spokesman, declined to comment on
Friday.
When Mr. Leissner was issued his summons by investigators
earlier this year, he was informed he wasn't considered a target of
the inquiry, the Journal has reported.
Goldman's ties to 1MDB can be traced to the fund's launch in
2009. The bank has underwritten three bond offerings worth $6.5
billion, and it has advised the fund on two acquisitions.
Goldman's role in arranging the bond sales, and the some $590
million the firm collected from 1MDB for its work, are laid out in
the U.S. government's lawsuits.
Investigators are focusing on whether Goldman failed to comply
with the U.S. Bank Secrecy Act, which requires financial
institutions to report suspicious transactions to regulators. U.S.
authorities believe the bank may have had reason to suspect the
money it raised wasn't being used for its intended purpose, the
Journal reported in June.
Write to Justin Baer at justin.baer@wsj.com
(END) Dow Jones Newswires
July 29, 2016 20:34 ET (00:34 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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