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Christopher Langner

Were You at the 1MDB Party?

Singapore's crackdown underlines the risks in dotted lines.

The thing with the kind of investigation currently engulfing Malaysia's sovereign investment fund 1MDB is that it's hard to assess where the risk for investors ends. Unless you know exactly who was involved and to what extent, you might have to add a premium or a discount for companies with potential dotted lines to the eye of the storm.

The Monetary Authority of Singapore said Thursday it had found "instances of control failings" in the local units of UBS and Standard Chartered, as well as at the country's biggest bank, DBS Group Holdings. The regulator also pointed to "substantial breaches" of money-laundering regulations at Falcon Private Bank. Add to that list Goldman Sachs, JPMorgan Chase and Deutsche Bank, which have been named in investigations in the U.S. None has been accused of wrongdoing, and all have said they're cooperating with the probes.