Goldman in More Trouble, Now Embroiled in Singapore Probe

U.S. investment bank Goldman 's GS involvement has heightened in the scandal related to the multibillion-dollar 1Malaysia Development Bhd (1MDB) as the bank is expected to be under the purview of Singapore's ongoing criminal investigation related to fund flows of the fund, Bloomberg reported.

Notably, Goldman's local unit has come under the state's probe recently though the bank's relation with the Malaysian state investment company has been already under the city-state's police examination since the end of 2017. In November, Malaysia's minister of finance, Lim Guan Eng, announced the plan of recouping "full refund" of the fees earned by the bank from the 1MDB deals. Notably, nearly $600 million has been earned by the bank, including three bond offerings in 2012 and 2013, which raised $6.5 billion. Therefore, Singapore authorities are investigating the involvement of the Singapore subsidiary in partly movement of these fees.

The heightened investigation follows criminal charges slapped by Malaysia on Goldman and two of its former employees in relation to the 1MDB scandal, last week. However, the bank continues to deny any wrongdoing. Notably, Singapore is in full co-ordination with the U.S. Justice Department which has levied criminal charges against two former bankers of Goldman.

"The firm continues to cooperate with all authorities investigating this matter," Goldman spokesman Edward Naylor said.


The Malaysian government seeks to charge a total penalty of more than $2.7 billion worth funds that were allegedly misused and the $600 million that Goldman had received as fees. Moreover, the two employees, if proven guilty, will have to serve prison terms of up to 10 years.

Goldman has been scrutinized for playing a role in raising funds through bond offerings for 1MDB - the fund - which is facing corruption and money-laundering probes in roughly six countries. Notably, per the U.S. Department of Justice, misappropriation of funds, worth nearly $4.5 billion, from 1MDB by top officials of the fund and their colleagues from 2009 through 2014 also included funds raised through Goldman.

Early this December, the Federal Reserve sped up the investigation of the matter. Goldman's representatives met with the central bank and defended the bank's controls.

Bottom Line

Although Goldman has resolved quite a few litigation issues, it still faces probes and queries from several federal agencies, and a few foreign governments for its businesses conducted during the pre-crisis period. As a result, the company's legal expenses are expected to remain elevated, which may partially impede its bottom-line growth in the near term.

Hit by the scandal and other global issues, shares of Goldman have tumbled in the last few days on rising investors' worries. Shares of the company have lost around 31.2% in the past three months compared with the 25.4% decline of the industry .

Goldman currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Greenhill & Co., Inc. GHL has been witnessing upward estimate revisions for the past 60 days. Moreover, this Zacks #1 Ranked (Strong Buy) stock has appreciated more than 13% year to date. You can see the complete list of today's Zacks #1 Rank stocks here .

Popular, Inc. BPOP has been witnessing upward estimate revisions for the past 90 days. Additionally, the company's shares have rallied nearly 29.3%, year to date. It holds a Zacks Rank of 2 (Buy), at present.

Amalgamated Bank AMAL has been witnessing upward estimate revisions for the past 60 days. Also, the company's shares have gained 2.7%, year to date. It carries a Zacks Rank of 2, currently.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Popular, Inc. (BPOP): Free Stock Analysis Report

The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report

Greenhill & Co., Inc. (GHL): Free Stock Analysis Report

Amalgamated Bank (AMAL): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More