Hong Kong’s securities regulator has fined Goldman Sachs’s Asia business a record $350m for serious deficiencies in risk compliance and money laundering controls in relation to Malaysia’s 1MDB.
The Hong Kong fine is the first of more than $2bn of new penalties set to be announced on Thursday as regulators from the US to the UK and Singapore punish Goldman for its role in the looting of billions that was raised for Malaysia’s economic development and siphoned off in a money laundering and bribery scandal.
Hong Kong’s Securities and Futures Commission said it had reprimanded Goldman Sachs Asia and fined the Asian business of the Wall Street investment bank $350m for “serious lapses and deficiencies in its management supervisory, risk, compliance and anti-money laundering controls that contributed to the misappropriation of $2.6bn” from funds raised across three bond offerings in 2012 and 2013.
Goldman’s Asia business “lacked adequate controls in place to monitor staff and detect misconduct in its day-to-day operation, and allowed the 1MDB bond offerings to proceed when numerous red flags surrounding the offerings had not been properly scrutinised”, the SFC said on Thursday in a statement.
“The penalty in this case — assessed solely in accordance with Hong Kong’s own fining framework — reflects our findings that Goldman Sachs Asia failed to deal properly with numerous suspicious circumstances surrounding the 1MDB bond offerings”, said Ashley Alder, chief executive of the SFC.
Goldman Sachs has not yet commented on the fine.
The US Department of Justice fine is expected to be the biggest of the settlements announced on Thursday.