Courtesy of Pam Martens
David Solomon, Chairman and CEO, Goldman Sachs
Less than five months ago, Goldman Sachs and its Malaysian subsidiary were criminally charged by the U.S. Department of Justice “for a sweeping international corruption scheme, conspiring to avail itself of more than $1.6 billion in bribes to multiple high-level government officials across several countries so that the company could reap hundreds of millions of dollars in fees.” The case has become infamously known as the 1MDB scandal, named after the Malaysian sovereign wealth fund that was ripped off.
Goldman Sachs admitted to the charges and paid a criminal penalty and disgorgement of over $2.9 billion to settle the charges with the Department of Justice. That sum was on top of the $2.5 billion in cash it paid to settle with the government of Malaysia.
Stripping shareholders of $5.4 billion of their capital for criminal conduct in the midst of the worst pandemic in a century might have humbled a lesser institution and encouraged its Chairman and CEO, David Solomon, to stay out of the spotlight.
Unfortunately for Solomon, however, Goldman Sachs has just come into the cross-hairs of Senator Sherrod Brown, Chair of the Senate Banking Committee, and his feisty colleague on that Committee, Senator Elizabeth Warren.
The Senators sent Solomon a letter on Friday demanding answers to a series of questions surrounding Goldman’s decision to take advantage of a temporary, weakened capital requirement by federal regulators that was sold to the public as allowing banks to continue to make loans to businesses during the pandemic without being hamstrung by capital restraints.
…
