05 February 2020
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A senior Goldman Sachs executive left the firm after the Federal Reserve permanently barred him from the US banking industry for his alleged role in a Malaysian corruption scandal involving the looting of billions of dollars from a Malaysian sovereign wealth fund.
Andrea Vella, formerly one of Goldman Sachs' most senior investment bankers in Asia, failed to provide information he had about Malaysian financier Low Taek Jho's involvement in three bond offerings that Goldman underwrote for Malaysia's sovereign wealth fund, the regulator said.
In a settlement, the Federal Reserve found that the banker, Andrea Vella, had "engaged in unsafe and unsound practices" in connection with Goldman's role in arranging bond sales to raise $6.5bn for the 1Malaysia Development Berhad fund, known as 1MDB.
It is very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the prior government"
In its "order of prohibition", the Fed board said Vella failed to sound. "Low was a person of known concern to Goldman, and his involvement indicated heightened potential underwriting risks," the Fed said in its announcement.
Vella was suspended from Goldman when the US Department of Justice in effect identified the Italian banker as a suspected "co-conspirator" in the multibillion-dollar fraud scheme. He has now left the firm.
Two of his former colleagues, Tim Leissner and Roger Ng, have already been criminally charged for their alleged role in helping loot much of the $6bn that Goldman raised for Malaysian state investment fund 1MDB between 2012 and 2013.
Goldman Sachs CEO David Solomon already apologised for the role Leissner played in the Malaysia scandal during a January 2019 earnings call.
"It is very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the prior government," Solomon said. "For Leissner's role in that fraud, we apologise to the Malaysian people."
Malaysia has also announced it has completed the transfer of criminal cases against the three Goldman Sachs units facing charges linked to 1MDB to a higher court.
The High Court granted the application to move Goldman Sachs Singapore Pte's case from the Magistrate's Court, after previous attempts to do so were unsuccessful as the unit hadn't successfully been served the court summons.
"It's good news that everything was settled and the case has been transferred," Aaron Paul Chelliah, deputy public prosecutor, said in Kuala Lumpur on Wednesday. "At least one step in the process is complete, so it's a big development for us."
The step helps advance the 1MDB proceedings that have languished since Malaysia dragged the US bank into its first criminal case more than a year ago.
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