NEWS

Investors sue Goldman Sachs for damages over 1MDB scandal

Published
Modified 21 Dec 2018, 7:12 am

Investors in the US have filed a class action lawsuit against Goldman Sachs and three executives, seeking damages over its dealing with 1MDB.

According to a court filing sighted by Malaysiakini, the lawsuit states that between Feb 28, 2014 and Dec 17, 2018 (class period), Goldman made "materially false and misleading statements" regarding its business and operations.

The suit said this includes the information that "Goldman participated in a fraud and money-laundering scheme in collusion with 1MDB".

The executives named in the suit are Goldman CEO Lloyud Blankfein, and two former chief financial officers Harvey Schwartz, and Martin Chaves.

The fraud and money-laundering refers to the activities of former Goldman executives Tim Leissner and Roger Ng.

Leissner had in October pleaded guilty to two counts of conspiracy to launder money and conspiracy to violate the US Foreign Corrupt Practices Act (FCPA).

Ng, meanwhile, had been charged in absentia by the US Department of Justice (DOJ) for conspiring with Jho Low to launder billions of dollars embezzled from 1MDB and conspiring to violate the FCPA by paying bribes to various Malaysian and Abu Dhabi officials.

The lawsuit states that throughout class period, Goldman failed to disclose the extent of its dealings with 1MDB, even when it was under investigation by the DOJ.

"As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, the plaintiff and other class members have suffered significant losses and damages," it said.

The suit said it is not clear how many investors had been affected as it could be in the "hundreds or thousands".

The suit is seeking unspecified damages, as well as fees and other relief deemed proper by the courts.

The suit comes four days after attorney-general Tommy Thomas filed criminal charges against Goldman, Leissner, and Ng for the misappropriation of US$2.7 billion from 1MDB.

Malaysia will seek a total of US$3.3 billion (RM13.8 billion) from Goldman Sachs and jail terms against all individuals named in the suit.

Goldman in turn defended itself by saying that the previous BN government had lied to it.

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