(Reuters) – Managers and executives of Goldman Sachs Group Inc. reached a $ 79.5 million deal to settle shareholders’ claims that their poor supervision contributed to the bank’s entanglement in the looting scandal in Malaysia’s 1MDB sovereign wealth fund.
A preliminary settlement of the so-called shareholder derivative process was filed Friday in Manhattan’s federal court, and requires the approval of U.S. District Judge Vernon Broderick.
Defendants’ insurance companies would pay the $ 79.5 million to Goldman, which would apply them to compliance and governance measures, including giving more power to its chief compliance officer and creating an anonymous hotline for employee tips.
U.S. prosecutors say Goldman helped 1MDB arrange $ 6.5 billion in bond sales, but that $ 4.5 billion was diverted through bribes and returns to government officials, bankers and others.
Shareholders led by Atlanta-based Fulton County Employees’ Retirement System tried to hold Goldman CEO David Solomon, his predecessor Lloyd Blankfein and others responsible for “deliberate breach of their supervisory obligations” because the bank missed “red flags” for the scams.
None of the defendants admitted wrongdoing or responsibility when they agreed to reconcile. Goldman’s spokeswoman Maeve DuVally declined to comment.
The bank previously agreed to pay billions of dollars to authorities in the US and other countries over 1MDB and in 2020 entered into a three-year agreement on deferred prosecution with the US Department of Justice.