Goldman Sachs has started advanced talks with the United States Department of Justice (DOJ) to hopefully settle the 1MDB scandal with $2 billion in fines, sources briefed about the matter revealed on Friday.
According to CNBC, the sources, who spoke on condition of anonymity, revealed that the negotiations have yet to be finalized. However, the talks included the possibility of Goldman pleading guilty to allegations of bribery.
Furthermore, the international investment bank will most likely be ordered to establish an independent monitoring body that will be tasked with ensuring all operations are complying with the U.S. and global finance regulations.
Banking and finance experts noted that settling with the U.S. government will help Goldman Sachs in its efforts to gradually rebuild its reputation following allegations that some of its bankers helped plunder billions from the Malaysian investment fund, 1Malaysia Development Berhad (1MDB).
After the scandal emerged, global analysts have been expressing their thoughts on the expenses that Goldman will and has incurred from the issue. Wells Fargo's Mike Mayo estimated that the bank may incur as much as $5 billion in costs due to the 1MDB case.
Meanwhile, former Malaysian Prime Minister Najib Razak faces charges for his alleged involvement in the 1MDB fraud case. Razak is said to have cooperated with Malaysian fugitive and financier Jho Low.
According to The Guardian, it was alleged that Razak is faced with multiple criminal charges in Malaysia but he has denied wrongdoing. He also said during his trial in court that he was not aware of Jho's illegal dealings.
Former Goldman banker Tim Leissner has already pleaded guilty to the charges filed against him for his involvement in the matter. He will soon give up $43.7 million - the amount he reportedly received illicitly through the bribery case.
Razak, on the other hand, is also faced with charges in the U.S. but he also denied involvement in the scandal. Current Prime Minister Mahathir Mohamad said last week that he is looking forward to settling with the bank without going to court.
In an exclusive interview with Reuters, Mahathir noted that Goldman's offer at that time was "too small." He added that Malaysia already demanded $7.5 billion from the American bank, but that talks are still going on regarding the final settlement amount.
Mahathir further explained that Malaysia's demand regarding the 1MDB case settlement is "not the full amount" and it could still be reduced, depending on the developments as the two sides negotiate.
U.S. authorities previously revealed that around $4.5 billion was illicitly taken from the Malaysian fund. The issue resulted in Mahathir's historical win over Razak in last year's prime ministerial election.
