Goldman Sachs fights its corner, but it does not appear to be so convincing
- 1 month ago
Goldman Sachs is entering stormy, murky, waters.
According to former employees, investment funds similar to the 1MDB scandal do require further approval and that means that the top brass get to make the decision, especially when $6.5 billion are at stake.
The 2012 and 2013 transactions of the 1MDB bonds would not have taken place unless Goldman would have used its own funds to acquire new securities before offering them to investors, which in essence is taking a bigger risk and most certainly something the U.S. based bank is not known for.
A former employee, speaking under anonymity stated that, "Anyone who's been there a long time knows you can't do big things without senior people knowing, period," adding that "No matter how senior you are, there's always somebody above you. So, a lot of people had to decide they were comfortable committing billions of dollars to this."
Also raising eyebrows is the figure of $600 million of fees received by the bank, which is still extraordinary even considering the sum the deal brought in issuance.
Goldman has granted that two of its bankers did facilitate the proceedings, Tim Leissner, Roger Ng whom are in custody and Andrea Vella who has been dismissed temporarily.
However there are question marks over other employees, such as CFO Stephen Scherr, whom to many people’s belief had full knowledge of the mechanics undergoing the 1MDB instance, also given the fact both he and his predecessor Lloyd Blakenfein oversaw and reviewed the deals.
Goldman Sachs has gone through a torrid year and as its shares are finding themselves down 35% it might want this storm to blow over as quick as possible.
Source: Smart Trend Team