Goldman Sachs in talks to admit guilt, pay $2 billion fine to settle 1MDB probe

New York: Goldman Sachs Group Inc is negotiating a settlement of the 1MDB scandal that would include an admission of guilt by one of its subsidiaries instead of the parent company, according to people familiar with the matter.

The guilty plea would come from a unit in Asia, the people said, asking not to be identified because the talks are confidential.

The agreement would also include a fine of almost $2 billion, the people said.


Federal agencies have been seeking penalties between $1.5 billion and $2 billion in recent weeks, less than what some analysts had previously predicted, Bloomberg reported earlier this month.

Banks often push for subsidiaries to plead guilty to wrongdoing in order to avoid the impact on business that would come from a parent company’s admission of guilt. The deal could include an independent monitor to oversee compliance, Dow Jones reported earlier Thursday.

Spokespeople for Goldman and US Attorney Richard Donoghue in Brooklyn, New York, where the case is pending, didn’t have an immediate comment. The bank has previously said it continues to cooperate with all investigating authorities.

The bank is separately negotiating a settlement with Malaysian authorities, who have in recent discussions floated much lower figures than their public stance of wanting to recover $7.5 billion. Goldman is still privately seeking to reduce its sanctions, arguing that the crimes were committed by a rogue employee and that the bank wasn’t aware of the misconduct.

Goldman’s involvement with 1MDB has triggered one of the biggest blows to its reputation in recent years.