The 1 Malaysia Development Berhad logo is seen on a billboard at the funds flagship Tun Razak Exchange under-development site in Kuala Lumpur on July 3, 2015. MANAN VATSYAYANA/AFP/Getty Images

Authorities investigating a Malaysian state fund’s ties to Goldman Sachs Group Inc. in the U.S. are trying to establish whether the investment bank violated federal law after it failed to alert officials about a suspicious transaction in Malaysia, the Wall Street Journal reported Tuesday, citing sources. U.S. investigators are also probing whether Goldman misled bondholders when it sold securities issued by 1Malaysia Development Berhad (1MDB) fund.

According to the Journal, federal investigators are looking into the $3 billion that Goldman made through a bond issue for 1MDB. The probe is examining if the bank violated the U.S. Bank Secrecy Act — the anti-money laundering law — that requires financial institutions to report suspicious transactions to regulators, the Journal reported.

Goldman transferred half of the profit from the sale to a Swiss bank account, which is controlled by 1MDB, the report said. But the profits reportedly disappeared offshore with some ending up in the Malaysian Prime Minister Najib Razak’s bank account. The investigators believe that Goldman may have had reason to doubt that the money was not used for its planned purpose, the report said.

The investment bank has not been accused of any wrongdoing. The U.S. Federal Reserve reportedly said it believes that Goldman’s dealings with 1MDB could have risked the bank’s reputation.

Najib, who set up 1MDB in 2009 to boost economic growth in Malaysia, has been linked to the corruption scandal at the fund from which $681 million was traced to bank accounts reportedly owned by him. The prime minister has consistently denied the corruption allegations, first made in a July 2015 report by the Journal, which said that investigators tracked the money from an account at Falcon Private Bank in Singapore to accounts in Malaysia.