Goldman Sachs International has been fined £96.6m by UK regulators for risk management failures connected to the 1MDB scandal.
The Financial Conduct Authority and Prudential Regulation Authority announced the penalty as part of a $2.9bn globally coordinated resolution reached with the Goldman Sachs Group and its subsidiaries.
It means the investment bank will pay a record foreign bribery penalty in the US and enter a guilty plea for the first time for its role in the downfall of Malaysia’s 1MDB investment fund.
A Goldman subsidiary in Malaysia pleaded guilty to a single charge for its role in a scheme to divert billions of dollars raised for economic development in Malaysia.
The bank will also force chief executive David Solomon and his predecessor Lloyd Blankfein to return some of their compensation, according to an insider.
The parent company avoided conviction in a deal known as a deferred prosecution agreement, according to a court proceeding in New York on Thursday.
That is a significant victory for Goldman Sachs because a conviction might have risked losing some institutional clients that are restricted from working with financial firms with criminal records.
The bank will pay a record $2.3bn in the plea deal, US prosecutor Alixandra Smith said for breaching the Foreign Corrupt Practices Act.
In all, Goldman’s penalties will exceed $5bn globally.
From about 2009 to 2014, the bank’s Malaysia unit “knowingly and willfully agreed to violate the Foreign Corrupt Practices Act by corruptly promising, and paying bribes to foreign officials in order to obtain and retain business for Goldman Sachs,” the bank’s general counsel, Karen Seymour, told US District Judge Margo Brodie in a video hearing on Thursday.
Earlier on Thursday Goldman Sachs’ Asian unit was fined $350m by Hong Kong’s financial regulator over the 1MDB scandal.