Today’s Stock Market News – Goldman Sachs (GS) stock tumbled on Monday, as the fallout deepened over a scandal surrounding the plundering of a Malaysian government investment fund.


StockMarketNews.Today


The government of Malaysia has said it is looking for a “full refund” of the fees it paid to Goldman for the bond deals, according to Bloomberg. Goldman Sachs (GS) stock tumbled on Monday, as the fallout deepened over a scandal surrounding the plundering of a Malaysian government investment fund. Other bank stocks also fell.



Goldman Sachs stock plunged 7.5% to close at 206.05 in the stock market today. The drop follows a 3.9% decline on Friday. The stock over that time has sliced through its 200-day line, a key test of investor support. Goldman Sachs stock is at its lowest level in two years.

U.S. prosecutors allege that Goldman bankers were involved in a bribery and kickback scheme led by a Malaysian financier to land Goldman $6 billion in deals to underwrite bonds for the fund, known as 1Malaysia Development Berhad. One of those bankers pleaded guilty in the case in August.



1Malaysia Development Berhad, or 1MDB, was created nearly a decade ago to attract foreign investors. But in the years since, U.S. authorities allege that it has become a vehicle for graft, money-laundering and kickbacks to finance more than a few lavish purchases. The scandal has led to the arrest of Malaysia’s former prime minster, Najib Razak.

Tim Leissner, the Goldman banker who pleaded guilty, said that he and other Goldman employees hid those bribes from the bank. Leissner, according to the New York Times, said the concealment of the bribes and kickbacks was characteristic of the company’s culture. CNBC also reported that in 2009, then-Goldman CEO Lloyd Blankfein attended an introductory meeting with Razak. Jho Low, a Malaysian financier who was also charged in the scheme, attended as well.



Leissner, according to the Times, told a judge that he and “several other employees of Goldman Sachs at the time also concealed that we knew that Jho Low was promising and paying bribes and kickbacks to foreign officials to obtain and retain 1MDB business for Goldman Sachs.”

The government of Malaysia has said it is looking for a “full refund” of the fees it paid to Goldman for the bond deals, according to Bloomberg. Goldman reaped $600 million in fees from the bond-underwriting work.



Other Bank Stocks

JPMorgan (JPM) lost 2.1% on Monday, losing support at its 200-day line. Bank of America (BAC) gave up 2.7%. Citigroup (C) fell 2.4%. Bank of America and Citigroup were both below their 50-day and 200-day lines.

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