Washington, D.C. – Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement in response to the jury verdict in the trial of former Goldman Sachs’ junior partner in connection with the global money laundering scandal and looting of 1Malaysia Development Berhad (1MDB):
“The jury verdict convicting a single junior partner at Goldman Sachs for its indispensable, years-long involvement that enabled a global money laundering crime spree and looting of 1Malaysia Development Berhad (1MDB) is a grossly inadequate response by the Department of Justice to “one of the greatest financial heists in history” and one that corrupted democracy in an entire country. Without Goldman’s imprimatur and management of the private placement of $6.5 billion of bonds in three offerings in less than a year, there would have been no money to launder or loot, no money to bribe, buy votes and corrupt democracy and justice, and no murder of a prosecutor investigating those activities. The scale, scope, egregiousness and consequences of 1MDB’s crimes along with the depth, breadth and scope of Goldman’s role (as detailed here) cannot be overstated, but DOJ’s response has been egregiously understated.
“As has been reported, there were thirty-plus Goldman Sachs executives, supervisors and others involved with the activities associated with 1MDB and there were numerous red flags and explicit warnings of wrongful if not illegal and possible criminal conduct (as detailed here). Yet the Department of Justice prosecuted just one junior partner after getting a guilty plea from one other partner, as if those two were criminal masterminds that fooled all the supposedly smartest, highest paid bankers in the world as well as all of Goldman’s claimed state-of-the-art, high-tech, robust, comprehensive layers of risk, compliance, legal and audit systems and controls, and all of Goldman’s management. That isn’t credible and, if it happened, it’s a condemnation of Goldman Sachs.
“While even junior partners at Goldman should be prosecuted for committing crimes, DOJ has to end the double standard of justice where the little fish get prosecuted and the big fish are let off the hook. Even worse in this case, DOJ appears to have let Goldman Sachs – a recidivist with a long RAP sheet — use shareholder money to effectively buy get-out-of-jail-free cards for apparently every individual at Goldman but these two partners. The pathetic provisions of that one-sided, sweetheart settlement for Goldman are detailed here. It was no punishment and won’t be a deterrent.
“Don’t be fooled: convicting a junior Goldman partner is no justice for the many victims of 1MDB’s crimes. It will likely just reaffirm the belief that lawbreaking on Wall Street, even at such a global scale, has minimal consequences and, even then, almost only for the most junior people. That undermines not just respect for the Department of Justice, but for the law itself.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
Contact: Anton Becker at 202-618-6430 or abecker@bettermarkets.org
