Goldman Clawbacks Are More Stunning Than $5 Billion Penalty
The bank was bound to pay a hefty fine for its role in the 1MDB scandal. But making its executives pay is something new.
Breaks from the playbook.
Photographer: Nicky Loh/Bloomberg
There are certain things investors have come to expect when a large financial institution gets caught up in wrongdoing. Top leaders will apologize and say the conduct was unacceptable, adding that they’re fully cooperating with the relevant investigators. The institution will likely pay a settlement that’s in the billions of dollars, but it won’t cause lasting harm to its business.
It looked as if Goldman Sachs Group Inc. was following that same template for its role in the plundering of Malaysia’s 1MDB investment fund. It agreed to pay a large fine and even pleaded guilty for the first time in the bank’s history through a small Malaysian unit, but it was still poised to come out largely unscathed: