Goldman Sachs Group Inc CEO David Solomon has sought to distance the firm from alleged involvement in the multi-billion 1MDB scandal.
Bloomberg reported that Solomon had left a message for Goldman Sachs' employees who were demotivated by reports that implicated them in the scandal: "This isn't us."
“I am personally outraged that any employee of the firm would undertake the actions spelt out in the government’s pleadings,” Solomon reportedly said in a voicemail left with employees on Wednesday.
Bloomberg quoted a spokesperson for Goldman Sachs who confirmed the authenticity of the voicemail and declined to comment further.
"The behaviour of those individuals is reprehensible and inconsistent with the good work and integrity that defines work that 40,000 of you do every day," Solomon further said in reference to criminal charges filed by US prosecutors against two former Goldman Sachs bankers earlier this month.
One of them, Tim Leissner (photo below), was charged with two counts of conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act in relation to the 1MDB scandal.
He has pleaded guilty and will reportedly forfeit US$43.7 million.
According to the Bloomberg report, the firm’s then CEO Lloyd Blankfein had personally helped forge ties with Malaysia and 1MDB many years before Goldman Sachs ever arranged the bond deals at the heart of the probes.
It further stated that Blankfein had attended a 2009 meeting with former Malaysian prime minister Najib Abdul Razak, that eventually laid the groundwork for the relationship between Goldman Sachs and 1MDB.
"Reputationally, it is a disaster for Goldman," Oppenheimer & Co analysts led by Chris Kotowski was quoted as saying in a note to clients earlier this week.
Goldman Sachs' stock has suffered since US prosecutors implicated its former bankers.
On Monday, Goldman Sachs' shares dropped 7.5 percent following Finance Minister Lim Guan Eng's statement that Malaysia was seeking a full refund of all the fees it paid to the Wall Street bank for arranging billions of dollars of deals for troubled state fund 1MDB.
Goldman Sachs' shares continued to tumble this week and Bloomberg reported that it had lost over US$10 billion in market value after five consecutive days of dropped prices, putting it on track for the biggest five-day slump in seven years.
On possible financial impact for the firm, Solomon reportedly said in his voicemail that "any speculation in the press or elsewhere" on outcomes for the firm "is completely unfounded".
The Bloomberg report quoted analysts at Sanford C Bernstein & Co who estimated that Goldman Sachs could see fines of up to US$2 billion from the scandal, a figure they said was "ultimately manageable" for the firm.
"A group of people, including some of us in the executive office, are intensely focused on this matter,” Solomon said on the voicemail.
"For the rest of us, our job is to focus on our clients, our business and the many opportunities ahead," he said. - Mkini
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