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Goldman Sachs faced a 9-hour tidal wave of fines and condemnation from regulators all over the world for its involvement in the 1MDB scandal. finews.asia reviews the regulator verdicts unleashed during this period.

Financial watchdogs from both hemispheres slapped penalties on Goldman Sachs for its involvement in the 1MDB scandal with announcements all made within a period of around 9 hours. By the end of the regulatory stampede, the American banking giant faced new fines totaling more than $3.2 billion, including a $2.9 billion global resolution led by the U.S. Department of Justice which covered jurisdictions like the U.K., Singapore and Malaysia. 

Combined with the $3.9 billion settlement with the Malaysian government, which includes $2.5 million in cash alongside $1.4 billion in proceeds from asset seizures, the total cost exceeds $5 billion or about eight months of profits from Goldman Sachs.

finews.asia reviews the 9-hour unraveling.

5:00 PM – Hong Kong

At around 5:00 pm yesterday, Hong Kong’s Securities and Futures Commission (SFC) led the way with a $350 million fine – a record-high amount – against Goldman Sachs Asia over «serious lapses and deficiencies» in management, risk, compliance and anti-money laundering controls. The SFC’s fine is not part of the U.S.-led global resolution.

According to the SFC, Goldman Sachs Asia (GSA) was the «compliance and control hub» for its activities in the region and out of the $567 million in revenue generated from 1MDB’s $6.5 billion bond offering, it pocketed $210 million (37 percent) – the largest share amongst all the Goldman Sachs entities involved.

«[GSA] 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,» said Thomas Atkinson, SFC’s executive director of enforcement, in a statement. 

8:00 PM – U.K.

Approximately three hours later, British regulators followed up with an announcement that it had imposed a £96.6 million ($126 million) fine against Goldman Sachs International (GSI) for risk management failures.

According to U.K.’s Financial Conduct Authority and Prudential Regulation Authority, GSI has agreed to resolve the case with the two regulators which qualified it for a discount without which would have led to a financial penalty of £69,012,000 ($90,000,000) each on GSI.

«When confronted with allegations of bribery and staff misconduct, [GSI’s] mishandling allowed severe misconduct to go unaddressed,» said Mark Steward, FCA executive director of enforcement and market oversight, in a statement. «There is no amnesty for firms that tackle financial crime poorly, and the size of GSI’s fine reflects that.» 

12:00 AM – U.S.

Closer to midnight, the Securities and Exchange Commission (SEC) announced charges against Goldman Sachs Group (GSG) and a $1 billion settlement deal. This included a $606.3 million in disgorgement and a civil penalty of $400 million. 

«Corruption risks can be posed by those at all levels of a company, including in the senior ranks,» said Charles Cain, chief of the SEC Enforcement Division’s FCPA Unit, in a statement. «This case demonstrates how important it is for companies to have controls that are tailored to the risks presented by persons employed at all levels.»

Alongside the Department of Justice, other U.S. government entities involved in the $2.9 global resolution include the U.S. Federal Reserve Board of Governors and the New York Department of Financial Services.

2:00 AM – Singapore