Wall Street heavyweight Goldman Sachs has been fined $2.9 billion by the Securities and Exchange Commission for violating the Foreign Corrupt Practices Act, the oversight agency announced Thursday.
The charge stems from unnamed former senior employees at the investment firm bribing government officials in Malaysia and the United Arab Emirates for access to 1Malaysia Development Berhad, an investment fund that was supposed to promote economic development in Malaysia.
That access allowed Goldman Sachs to secure lucrative contracts that included underwriting $6.5 billion in bonds for the Malaysian fund, which meant millions in fees going to the investment firm.
The SEC found that in getting that access, Goldman Sachs violated the anti-bribery, internal accounting controls, and books and records provisions of the federal securities laws.
“Corruption risks can be posed by those at all levels of a company, including in the senior ranks. This case demonstrates how important it is for companies to have controls that are tailored to the risks presented by persons employed at all levels,” said Charles Cain, the chief of the SEC Enforcement Division’s Foreign Corrupt Practices Act Unit.
The money raised for the fund was reportedly not used to improve Malaysia’s economy. Instead, it lined the pockets of Malaysian financier Low Taek Jho.
Jho allegedly used the money to buy a private jet, a luxury yacht, artwork by Pablo Picasso and Claude Monet, and diamond jewelry. The funds also financed U.S. films such as The Wolf of Wall Street and Dumb and Dumber To, which were produced by a friend of Jho’s.
Six countries have launched money laundering, financial mismanagement, and criminal investigations into the investment fund, according to Reuters.
