WASHINGTON, D.C.— Dennis M. Kelleher, Co-founder, President and CEO, issued the following statement in connection with the sentencing of former Goldman Sachs partner Roger Ng in connection with his crimes in the looting and global money-laundering crime spree of 1 Malaysia Development Berhad (1MDB):
“30 officers and executives at Goldman Sachs were involved in enabling the shocking global 1MDB crime spree, ‘one of the greatest financial heists in history.’ Those crimes would not have happened without Goldman’s key role and involvement. But, rather than go after those 30 Goldman officers and executives, the DOJ gave the bank a sweetheart deal (as detailed here), effectively letting the bank buy a ‘get out of jail free’ card for its executives. Compounding that miscarriage of justice, the DOJ prosecuted just one junior Goldman partner, Roger Ng. His sentence today of ten years in prison sends the wrong message.
“While anyone who breaks the law should be punished, including Ng, only prosecuting low level staff at banks but not the senior executives and officers just reaffirms the widespread belief if not reality on Wall Street that crime pays. Bankers, not banks, commit crimes and until the Justice Department throws the book at senior executives and officers, the lawlessness in finance will continue. The 1MDB case regrettably shows that even enabling and participating in a global criminal enterprise will only have minimal consequences for the bank and virtually none for executives, officers, or senior bankers. That doesn’t punish or deter; in fact, it rewards past crimes and incentivizes future crimes.
“That is especially true when dealing with repeat offenders like Goldman Sachs, an egregious recidivist lawbreaker for decades (as detailed here and here). This isn’t even the first time Goldman’s egregious lawbreaking included scapegoating a junior Goldman staffer. It also happened in the outrageous ‘built to blow up’ Abacus CDO case where Goldman pocketed tens if not hundreds of millions of dollars for its fraudulent CDO assembly line that shorted the subprime housing market, inflicting pain on tens of millions of Americans. Yet, Goldman still got less than a slap-on-the-wrist. In stark contrast, the SEC went after the lowly “Fabulous Fab” (1 of 5,000 Goldman Vice Presidents), who was charged, tried, and found guilty, largely because he colorfully bragged to his girlfriend in emails. Given how favorably Goldman has been treated in the past, it’s involvement with 1MDB crimes should be no surprise.
“Scapegoating Ng does not serve justice. No matter how much he deserves to be punished for his crimes, this case will remain an injustice given all the Goldman executives and officers who enabled the 1MDB crime spree but kept their jobs, got promoted, and continued their careers. Until that changes and until senior executives and officers are personally and meaningfully punished, the DOJ will continue to lose its fight against the ever-increasing financial crime spree.”
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.org