Straits Herald February 5, 2020

The Federal Reserve permanently barred a senior Goldman Sachs executive from the banking industry over the 1MDB scandal, the US central bank announced Tuesday.

(FILES) In this file photo taken on May 2, 2018 a view of the Federal Reserve building is seen in Washington, DC. -The Fed action affects Andrea Vella, who had been placed on leave amid a crackdown over 1MDB, the scandal-plagued Malaysian investment fund for which Goldman Sachs helped raise $6.5 billion. (Photo by Brendan Smialowski / AFP)

The Fed action affects Andrea Vella, who had been placed on leave amid a crackdown over 1MDB, the scandal-plagued Malaysian investment fund for which Goldman Sachs helped raise $6.5 billion. 

The Justice Department has said more than $4.5 billion was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015.

Vella “engaged in unsafe and unsound practices” by failing to take action over the involvement of Low Taek Jho in bond offerings in 2012 and 2013, the Fed said in an administrative order. 

Low, an alleged mastermind and an intermediary to the Malaysian fund, “was a person of known concern to Goldman, and his involvement indicated heightened potential underwriting risks,” the Fed said in a news release.

The Fed’s action comes on the heels of earlier moves to permanently bar two former Goldman bankers, Tim Leissner and Roger Ng, from the industry. 

Goldman Sachs last month set aside $1.1 billion in legal costs, with most of the funds expected to go to 1MDB settlements. – AFP