A new development has come into the forefront in relation to the multibillion-dollar 1Malaysia Development Bhd (1MDB) scandal, in which U.S. investment bank Goldman Sachs (GS - Free Report) is engulfed. Three units of the company that had pleaded guilty have been declared clean by Malaysia’s government.
All four charges against Goldman Sachs International, along with allegations against its Asian entities Goldman Sachs (Asia) LLC and Goldman Sachs (Singapore) Pte have been dropped.
This comes post $3.9 billion worth settlement that Goldman had entered with Malaysia in mid-August.
Per a Reuters article, Goldman has already paid $2.5 billion as cash penalty to Malaysia’s government. It has also guaranteed the return of $1.4 billion in 1MDB assets seized around the world, per the settlement terms.
Goldman has been under scrutiny for playing a role in raising funds through bond offerings for 1MDB, the fund entangled in corruption and money-laundering probes in roughly six countries. Per the Department of Justice (“DoJ”), misappropriation of funds worth $4.5 billion from 1MDB by top officials of the fund and their colleagues from 2009 through 2014, included funds raised through Goldman as well.
Therefore, regulators of around 14 countries, including the United States, Malaysia, Singapore, have probed Goldman for its role as an underwriter and its doings during the transactions.
Per DoJ, roughly $600 million was earned by the bank, including three bond offerings in 2012 and 2013, which raised $6.5 billion.
Remarkably, criminal charges against Goldman and 17 executives had been filed by prosecutors in Malaysia, who were demanding a penalty of more than $2.7 billion. This was believed to be allegedly misappropriated from the proceeds, and the return of $600 million of fees taken by Goldman.
Malaysian politics was adversely impacted by the scandal and lifetime bans were imposed on Goldman bankers, including Andrea Vella and Tim Leissner, by the financial industry.
Goldman continues to make efforts to tap new growth opportunities through several strategic investments, which are likely to support its overall business growth. However, pending litigation issues remain a concern for the company.
The stock has gained 4.4% over the past six months compared with the industry’s growth of 11.5%.
Currently, Goldman carries a Zacks Rank #3 (Hold).
Stocks to Consider
TD Ameritrade Holding Corporation (AMTD - Free Report) has been witnessing upward estimate revisions for the past 30 days. Moreover, this Zacks #1 Ranked (Strong Buy) stock has rallied more than 6% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
E*TRADE Financial Corporation (ETFC - Free Report) has been witnessing upward estimate revisions for the past 30 days. Further, the company’s shares have gained 27.4% in the past six months. At present, it carries a Zacks Rank of 2 (Buy).
Artisan Partners Asset Management Inc. (APAM - Free Report) has been witnessing upward estimate revisions for the past 30 days. Additionally, the stock has surged 43.4% in six months’ time. It currently sports a Zacks Rank #1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>