New York’s financial regulator has asked Goldman Sachs Group Inc. for information on its dealings with 1Malaysia Development Berhard amid the ongoing U.S. investigation into corruption allegations against the Malaysian state-run fund, according to reports Thursday. Goldman is also being probed to determine whether the investment bank misled bondholders when it sold securities issued by 1MDB.
New York’s Department of Financial Services sent a letter to Goldman Thursday asking for details of the bond deals. It also sought trading records and research documents from the Wall Street firm along with a copy of the March 2013 presentation Goldman made for 1MDB for one of the bond sales.
“We are aware of their interest in this matter and have been in dialogue with them on it for some time," a Goldman Sachs spokesman told Reuters.
Meanwhile, Goldman is being investigated by the feds for $3 billion that it made through a bond issued for 1MDB. The probe is examining if the bank violated the U.S. Bank Secrecy Act — an anti-money laundering law — that requires financial institutions to report suspicious transactions to regulators, according to a July report by the Wall Street Journal.
Goldman reportedly transferred half of the profit from the sale to a Swiss bank account controlled by 1MDB. However, the profits disappeared offshore, with some ending up in the Malaysian Prime Minister Najib Razak’s bank account, the Journal had reported. The investigators believe Goldman may have had reason to doubt that the money was not used for its planned purpose.
The investment bank is not facing accusations of any wrongdoing. The U.S. Federal Reserve reportedly said it believes Goldman’s dealings with 1MDB could have risked the bank’s reputation.
In a court filing late last month, the Justice Department said it is seeking to seize more than $1 billion of assets linked to 1MDB, including 11 luxury properties in the U.S. The department said that 1MDB’s misappropriated funds made their way through shell companies, checks, wire transfers and accounts with Deutsche Bank AG, JPMorgan Chase & Co., Rothschild Bank AG and BSI Bank Ltd. Those banks were not accused of misconduct.