Goldman Sachs to pay NYS Department of Financial Services $150M following international criminal scheme

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NEW YORK (WWTI) — Goldman Sachs group has come to an agreement with the New York State Department of Financial Services.

The New York State Department of Financial services announced that Goldman Sachs has agreed to pay $150 million in penalties. Goldman Sachs Group is a global banking and financial institution that holds assets over $1 trillion.

This is a part of a Consent Order that resolved an investigation where Goldman failed to address red flags with bond transactions. Goldman was found to violate laws in relation to their provision of services to 1Malaysia Development Berhad. These actions resulted in fees over $580 million.

According to the DFS, transactions with 1MDB involved a criminal scheme that diverted funds from bond offerings to pay bribes to Malaysian government officials.

The agreement announced on October 21, is a part of a global settlement with the U.S. Department of Justice, Securities and Exchange Commission, Federal Reserve Board. The agreement resolve federal, state and foreign law violations.

“Earning and maintaining public trust in our financial system is imperative especially at this time of multiple crises. When a global financial institution has a significant control failure anywhere in the world, it sends shock waves to its affiliates and counter parties throughout the financial system,” said DFS Superintendent Lacewell. “Compliance and due diligence start with the tone at the top and senior leadership must set the bar so that affiliates can operate safely and soundly for its customers and the integrity of the financial markets.”

Additionally, the agreement will require Goldman to create a written plan detailing policy enhancements as to how services are provided to Goldman Sachs Bank USA. The plan must include adequate staffing, proof that investment decisions are in the banks best decision and the promotion of appropriate intra-affiliate information.

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