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Fed Bans Former Goldman Bankers Over Malaysian Fund Scandal
Malaysia filed criminal charges in December against Goldman and two of its former bankers for allegedly defrauding its government under a bribery scandal.
The Federal Reserve has banned two former Goldman Sachs Group employees from the banking industry because of their roles in a scheme to illegally divert billions of dollars from a Malaysian sovereign wealth fund.
The regulator announced Tuesday that it barred Ng Chong Hwa, also known as Roger Ng, and Tim Leissner, the former senior investment bankers at Goldman who helped coordinate bond offerings for 1Malaysia Development Berhad in 2012 and 2013. The Fed said the bankers personally benefited from the deal, whose proceeds were also used to bribe government officials in Malaysia and Abu Dhabi.
Malaysia filed criminal charges in December against Goldman, Leissner, and Ng for allegedly defrauding its government under the bribery scandal. The country’s attorney general accused the group of conspiring to bribe public officials so Goldman would be selected to underwrite the bond offerings for 1MDB.
A Goldman spokesman said at the time the bank believed the charges were misdirected and that it was cooperating with all authorities investigating the bond deals.
“Certain members of the former Malaysian government and 1MDB lied to Goldman Sachs, outside counsel and others about the use of proceeds from these transactions," he said in an emailed statement on December 17.
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The Fed said Leissner has consented to the permanent ban from banking and was fined $1.42 million. In August, he pleaded guilty to criminal charges brought by the Department of Justice in the Eastern District of New York for conspiring to violate the Foreign Corrupt Practices Act and to commit money laundering.
Ng was arrested in Malaysia last year at the request of the U.S., which is seeking to extradite him on similar charges faced by Leissner, according to a Fed document dated March 11.