In re THE GOLDMAN SACHS

UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 90243 / October 22, 2020 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 4191 / October 22, 2020 
ADMINISTRATIVE PROCEEDING 
File No. 3-20132 
In the Matter of 
THE GOLDMAN SACHS 
GROUP, INC., 
Respondent. 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER 
I. 
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 
21C of the Securities Exchange Act of 1934 (“Exchange Act”), against The Goldman Sachs 
Group, Inc. (“Goldman Sachs” or “Respondent” or the “Company”). 
II. 
In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, Respondent admits the Commission’s 
jurisdiction over it and the subject matter of these proceedings, and consents to the entry of this 
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities 
Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set 
forth below.    

 
 
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III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
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 that:  
 
SUMMARY 
 
1. This matter relates to a scheme perpetrated by now former senior employees of 
Goldman Sachs who authorized and paid bribes and kickbacks to government officials in Malaysia 
and the Emirate of Abu Dhabi (“Abu Dhabi”) in order to secure lucrative business for the 
Company and benefits for themselves.  Goldman Sachs violated the antibribery, books and records 
and internal accounting controls provisions of the Foreign Corrupt Practices Act (“FCPA”) in 
connection with the scheme. 
 
2. 1Malaysia Development Berhad (“1MDB”) is a Malaysian state-owned and 
controlled investment fund created to pursue projects for the economic benefit of Malaysia and its 
people.  Between approximately 2009 and 2014, as 1MDB raised capital to fund its projects, 
billions of dollars were diverted from 1MDB.  The diverted funds included a substantial portion of 
the approximately $6.5 billion in capital that 1MDB raised in 2012 and 2013 through three bond 
offerings that it executed with Goldman Sachs (the “Bond Deals”).  As part of the scheme, certain 
former senior employees of Goldman Sachs authorized and paid bribes to government officials in 
Malaysia and in Abu Dhabi to obtain and retain lucrative business for Goldman Sachs, including 
the 2012 and 2013 bond deals, from which Goldman Sachs earned approximately $600 million. 
 
Respondent
 
 
3. The Goldman Sachs Group, Inc. is a U.S. based global investment banking, 
securities, and investment management firm headquartered in New York, New York.  The 
common stock of the Company is registered pursuant to Section 12(b) of the Exchange Act and is 
listed for trading on the New York Stock Exchange under the stock symbol “GS.”  The Company 
is and was an “issuer” within the meaning of the Foreign Corrupt Practices Act (“FCPA”) during 
the relevant period. 
 
Related Entities and Individuals
 
 
4. 1MDB was a strategic investment and development company wholly-owned by the 
Malaysian government through the Malaysian Ministry of Finance.  It was formed in 2009 when 
the Malaysian government took control of a municipal entity called Terengganu Investment 
Authority (“TIA”).  1MDB was created to pursue investment and development projects for the 
economic benefit of Malaysia and its people, primarily relying on debt to fund these investments.  
1MDB’s development projects were focused in the areas of energy, real estate, tourism and 
agribusiness.  1MDB was overseen by senior Malaysian government officials, was controlled by 
the Malaysian government, and performed a government function on behalf of Malaysia.   
 
                                                
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 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other 
person or entity in this or any other proceeding.  
 

 
 
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5. The Middle Eastern Sovereign Wealth Fund was an investment fund wholly-
owned by the government of Abu Dhabi.  It was established by the government of Abu Dhabi 
pursuant to an Emiri Decree in or around 1984 with a mandate to advance Abu Dhabi’s natural 
petroleum wealth for the development of the emirate.  The Middle Eastern Sovereign Wealth Fund 
was overseen by senior Abu Dhabi government officials, was controlled by the Abu Dhabi 
government, which appointed all the members of the Middle Eastern Sovereign Wealth Fund’s 
board of directors, and performed a government function on behalf of Abu Dhabi. 
 
6. The Middle Eastern Investment Firm, a subsidiary of the Middle Eastern 
Sovereign Wealth Fund, was a private joint stock company incorporated under the laws of Abu 
Dhabi.   
 
7. Tim Leissner, age 51, was employed by Goldman Sachs between 1998 and 
February 2016.  Prior to his separation from Goldman Sachs, Leissner was a participating 
managing director (or “partner”), vice chairman of Investment Banking in Asia Ex-Japan, and 
chairman of South East Asia.  Leissner was a banker with relationship management responsibility 
for various clients in the Asia Ex-Japan region, including 1MDB.   
 
8. Jho Low, age 38, is a Malaysian national who advised on the creation of TIA, 
1MDB’s predecessor entity.  Jho Low has never held a formal position at 1MDB.  Jho Low 
nevertheless exercised significant control over 1MDB during the time period relevant to the Order.  
Jho Low worked as a finder and intermediary in relation to 1MDB officials and other government 
officials on a number of financial transactions and projects involving Goldman Sachs.  
 
9. Roger Ng, age 47, is a Malaysian national who was employed as a Managing 
Director and acted as an agent of Goldman Sachs.  He worked with Leissner at Goldman Sachs 
from approximately 2009 to May 2014.   
 
10. Najib Razak, age 67, was the Prime Minister of Malaysia from 2009 to 2018 who 
held a position of authority with 1MDB.  
 
FACTS 
 
Background 
11. 1MDB was formed in or around 2009, when the Malaysian government asserted 
federal control over TIA, which previously had been a development fund controlled by the 
Malaysian state of Terengganu.  
 
12. 1MDB was created for the stated purpose of pursuing investment projects for the 
economic benefit of Malaysia and its people, relying mainly on debt to support these projects.  
1MDB was supervised by senior Malaysian government officials, controlled by the Malaysian 
government, and performed a government function on behalf of Malaysia.  Upon 1MDB’s 
formation, Najib Razak assumed a position of authority with 1MDB.  Najib Razak had the 
authority to approve all appointments to, and removals from, 1MDB’s Board of Directors and 
1MDB’s Senior Management Team.  In addition, any financial commitments by 1MDB, including 
investments, that were likely to affect a guarantee given by the government of Malaysia for the 

 
 
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benefit of 1MDB or any policy of the Malaysian government, required the approval of Najib 
Razak. 
 
Malaysian Intermediary Jho Low 
 
13. Low, a Malaysian national with close ties to senior Malaysian government officials, 
had advised on the creation of TIA, 1MDB’s predecessor entity in 2009.  Thereafter, he continued 
to act as an intermediary or finder for 1MDB in relation to a number of financial transactions and 
projects, including those involving Goldman Sachs.  
  
14. Goldman Sachs, through its participating managing director Leissner, was retained 
to provide financial advice to the government of Malaysia on the same TIA project in 2009 
(“Project Tiara”).  Certain senior Goldman Sachs employees, including at least Leissner and Ng, 
knew that Low worked as a finder and intermediary in relation to TIA at the time of Project Tiara.  
Leissner and Ng would later work to conceal Low’s involvement in Goldman-related transactions 
from others at the Company.  They did so knowing that Low remained close to 1MDB officials 
and other government officials in Malaysia, including Najib Razak, and Abu Dhabi.   
 
Goldman Sachs’s Anti-Corruption Program and Deal Approval Process 
 
15. Goldman Sachs had a general anti-corruption policy (including both a written 
Statement of Principles Regarding Anti-Bribery and related policies and procedures, collectively 
the “Anti-Bribery Policy”) applicable to all employees that expressly prohibited improper 
payments to government officials intended to obtain or retain business for the company.  Goldman 
Sachs’s Anti-Bribery Policy was overseen and enforced by its compliance function (the 
“Compliance Group”) and its Business Intelligence Group (the “Intelligence Group”).   
 
16. In addition to the Anti-Bribery Policy aspects of Goldman Sachs’s system of 
internal accounting controls, including the committee review process, were intended to help ensure 
that transactions were executed in accordance with management’s wishes.  The Compliance Group 
and the Intelligence Group worked with, and as part of, various Goldman Sachs committees (“GS 
Committees”) in reviewing transactions.  
 
17. Goldman Sachs’s role as underwriter for the Bond Deals meant that the firm would 
be using its own capital to fund the initial purchase of the 1MDB bonds.  Accordingly, the 
transactions were formally reviewed and approved by multiple GS Committees including the 
Firmwide Capital Committee (“GS Capital Committee”).  The GS Capital Committee’s charter 
states as follows:   
 
The   Committee   provides   approval   and   oversight   globally   of   debt-related 
transactions,  including  principal  commitments  of  the  Firm’s  capital.  The 
Committee  aims  to  ensure  that  business, reputational and  suitability  standards  for 
underwritings and capital commitments are maintained on a global basis.   
 
18. The GS Committees played a critical role in the chain of management approvals 
necessary for transactions such as the Bond Deals to be consummated.  At the time of the Bond 

 
 
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Deals, transactions could be granted conditional approval by the GS Capital Committee, provided 
there was further follow-up on specified issues prior to deal execution.  In terms of recordkeeping 
and documentation, the principal inputs to the GS Capital Committee were the internal memoranda 
prepared by deal team members under the supervision of senior employees such as Leissner, and 
the principal outputs were written meeting minutes that should record the GS Capital Committee’s 
decisions and set forth any prerequisite follow-up items.   
 
Early Attempts To Do Business With Jho Low 
 
19. Following the successful establishment of 1MDB in 2009, Leissner and Ng 
supported at least three separate attempts to make Low a formal client of Goldman Sachs.  These 
efforts took place between September 2009 and March 2011.  Leissner and Ng supported them 
because, in part, they believed that Low would work to deliver lucrative business deals, including 
from 1MDB, for the benefit of Goldman Sachs.   
 
20. These attempts were unsuccessful because certain personnel within Goldman 
Sachs’s Compliance Group and Intelligence Group refused to approve any client relationship with 
Low based, in part, on concerns that these groups had concerning the source of Low’s wealth.  
Personnel within the Compliance Group and the Intelligence Group communicated the rejection of 
Low’s client application to Leissner and others within Goldman Sachs.  
 
21. For example, in early 2011, another Goldman Sachs senior employee was aware 
that Leissner and Ng attempted to advise a business controlled by Low.  This proposed 
engagement was declined following concerns raised by the Intelligence Group regarding Low and 
his source of wealth, among other things.  Thus, the other Goldman Sachs senior employee was 
aware that the Intelligence Group was unlikely to approve proposed Goldman Sachs business 
involving Low.  
 
22. Notwithstanding Leissner, Ng and the other senior employee’s knowledge of the 
concerns that had been raised about Low not being a suitable client for Goldman Sachs, they 
continued to work with Low based upon their belief that Low would help ensure that government 
officials in Malaysia and Abu Dhabi would deliver lucrative business deals to Goldman Sachs. 
 
The Bond Deals 
 
23. Goldman Sachs was subsequently retained by 1MDB in 2012 and 2013 to assist it 
with three large debt financings – “the Bond Deals.”  Leissner and other employees of Goldman 
Sachs knew that Low was playing a central role in these transactions, including by acting as an 
intermediary between Goldman Sachs, 1MDB and other Malaysian and Abu Dhabi government 
officials.  Leissner and Ng also knew that Low promised to pay bribes and kickbacks to these 
officials to secure 1MDB business for Goldman Sachs.   
 
24. Throughout 2012 and 2013, Leissner and Ng actively worked to obtain and retain 
business from 1MDB for the benefit of Goldman Sachs through the promise and payment of bribes 
and kickbacks to government officials in Malaysia and Abu Dhabi using, in part, misappropriated 
and embezzled proceeds from the Bond Deals.  During this time, through the course of the scheme, 

 
 
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Leissner, Low and others paid millions of dollars in bribes and kickbacks to government officials, 
and secured 1MDB business for Goldman Sachs, in particular, the three Bond Deals and related 
transactions.  These three bond financing transactions were referred to internally at Goldman Sachs 
as “Project Magnolia,” “Project Maximus” and “Project Catalyze.”  
 
25. Although the purported purpose of the approximately $6.5 billion raised by the 
three bond transactions was to support 1MDB projects for the benefit of the Malaysian people, 
Leissner, Low and others instead planned and executed a scheme to misappropriate more than $2.7 
billion and distribute the money as bribes and kickbacks to government officials in Malaysia and 
Abu Dhabi, including but not limited to Najib Razak, as well as benefits to other participants in the 
scheme and their families, including Leissner. 
 
Goldman Sachs Obtains Project Magnolia from 1MDB 
 
26. On at least two occasions in early 2012, senior employees of Goldman Sachs met 
with Low and 1MDB officials to discuss 1MDB’s proposed purchase of a Malaysian energy 
company, Tanjong Energy Holdings Sdn Bhd, (“Tanjong”) and Goldman Sachs’s preparedness to 
help obtain financing for the purchase.  This financing transaction was known as “Project 
Magnolia,” which ultimately closed in May 2012, earning approximately $193 million for 
Goldman Sachs.  
 
27. During these early-2012 meetings in Malaysia and London, according to Leissner, 
the attendees discussed with Low the type of financial guarantee that 1MDB needed to obtain for 
the bond issuance to meet Goldman Sachs’s underwriting requirements.  They ultimately agreed on 
a guarantee from Abu Dhabi’s Middle Eastern Sovereign Wealth Fund.  During this time and 
afterward, Leissner and other senior employees of Goldman Sachs understood that Low was acting 
as an intermediary between 1MDB, Najib Razak and other government officials from Abu Dhabi. 
 
28. During a meeting in London in February 2012, Low explained that in order to 
secure the guarantee from the Middle Eastern Sovereign Wealth Fund they would have to pay 
bribes and kickbacks to government officials, including to certain officials in Malaysia and Abu 
Dhabi.  After the February 2012 meeting, Leissner, Ng and another senior employee of Goldman 
Sachs discussed this information.    
 
29. In March 2012, 1MDB formally engaged Goldman Sachs to be the sole underwriter 
for the $1.75 billion debt financing transaction designed, in part, to pay for the acquisition of 
Tanjong, which was guaranteed by the Middle Eastern Sovereign Wealth Fund.   
 
30. Shortly thereafter in March 2012, Leissner  and other employees of Goldman Sachs 
met in Abu Dhabi with Low and certain 1MDB officials and officials of the Middle Eastern 
Sovereign Wealth Fund and the Middle Eastern Investment Firm to discuss the contemplated 
guarantee for Project Magnolia.  Throughout that time, senior employees of Goldman Sachs, 
including Leissner, knew Low had arranged the meetings with the officials of the Middle Eastern 
Sovereign Wealth Fund and its subsidiary, the Middle Eastern Investment Firm, and Leissner and 
Ng also knew that some of these officials, among others, would be paid bribes by Low to secure 
the guarantee.  

 
 
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31. Leissner, Ng and another senior employee of Goldman Sachs also knew that Low 
would pay bribes and kickbacks to influence Malaysian officials to obtain the necessary approvals 
to execute Project Magnolia for Goldman Sachs.  During the months leading up to the issuance of 
the Project Magnolia bonds, Leissner knew that Low enlisted 1MDB officials to assist him in 
ensuring that all necessary approvals were obtained from 1MDB officials and others to complete 
the transaction, in exchange for bribes and kickbacks to those 1MDB officials. 
 
32. In April 2012, before the closing of Project Magnolia, Leissner and other members 
of the deal team participated in a GS Committee meeting that included many senior Goldman 
Sachs executives participating from multiple locations globally, including New York City, New 
York.  The meeting was convened for the purpose of approving Goldman Sachs’s potential 
commitment of capital in Project Magnolia.  During the meeting, Leissner was directly asked 
whether Low was involved in Project Magnolia.  Leissner told the GS Committee that Low was 
not involved in Project Magnolia, though he and other senior employees of Goldman Sachs knew 
at the time that this statement was false.   
 
33. In late May 2012, near the closing of Project Magnolia, Leissner actively worked 
with Ng and Low to divert some of the bond proceeds that Goldman Sachs raised from Project 
Magnolia into the bank accounts of shell companies that Leissner, Ng and Low beneficially owned 
and controlled.  These individuals each understood and expected to keep some of the diverted 
funds for their personal use, and that other funds would be used to pay bribes and kickbacks to 
government officials in Malaysia and Abu Dhabi and elsewhere in exchange for their assistance in 
obtaining and retaining business for Goldman Sachs in connection with Project Magnolia. 
 
34. Goldman Sachs transferred the proceeds of the Magnolia bond offering via wire to 
the 1MDB entity designated to receive the payment.  At the time, Leissner, Low and others knew 
that a large portion of the proceeds of the bond offering would be diverted to themselves and 
others, including government officials, through shell companies beneficially owned and controlled 
by Low, Leissner and others.   
 
35. Goldman Sachs’s books and records relating to the Magnolia bond offering failed 
to accurately reflect key aspects of the transaction, including the involvement of a third-party 
intermediary. 
 
36. Within three months of the May 2012 closing of Project Magnolia, millions of 
dollars of bond proceeds were transferred through shell companies beneficially owned and 
controlled by Low and other participants in the scheme into a Hong Kong bank account in the 
name of shell companies incorporated in the British Virgin Islands and controlled by Leissner.  
Leissner used a portion of these funds for his personal use and enjoyment.  Leissner also knew that 
other of the bond proceeds from Project Magnolia were transferred through shell company 
accounts beneficially owned and controlled by Low and other participants in the scheme and 
ultimately into accounts of shell companies beneficially owned and controlled by Abu Dhabi 
government officials with influence over the transaction. 
 
 

 
 
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Goldman Sachs Obtains Project Maximus from 1MDB 
 
37. In May 2012, Goldman Sachs began to plan a second bond transaction, known 
internally as “Project Maximus.”  It was designed, in part, to raise capital for 1MDB to purchase a 
second Malaysian power generation company, Genting Berhad (“Genting”).  The mandate to 
underwrite this bond offering was awarded by 1MDB to Goldman Sachs, and it was structured 
similarly to the first bond issuance but with an indirect guarantee from the Middle Eastern 
Sovereign Wealth Fund.  Project Maximus ultimately closed on or about October 19, 2012, raising 
approximately $1.75 billion for the designated 1MDB entity and resulting in approximately $188 
million for Goldman Sachs.  This was six months after the close of Project Magnolia.  All told, in 
these two 2012 transactions, 1MDB issued a total of $3.5 billion in bonds that were underwritten 
by Goldman and guaranteed by the Middle Eastern Sovereign Wealth Fund. 
 
38. Leissner and Ng understood and intended that Low and others would pay bribes 
and kickbacks to influence Malaysian and Abu Dhabi officials to obtain the necessary approvals to 
execute the Project Maximus bond offering.  Although the Middle Eastern Sovereign Wealth Fund 
did not provide a direct financial guarantee of the Project Maximus bonds as it had with Project 
Magnolia, it nevertheless agreed to provide an indirect guarantee.  As with Project Magnolia, 
Leissner and Ng continued to work with Low to acquire this business for Goldman Sachs.  
  
39. Leissner and Ng knew that a large portion of the proceeds of Project Maximus 
would be illegally diverted to themselves and others, including government officials, through shell 
companies beneficially owned and controlled by Leissner and others.  Leissner also knew at the 
time that Najib Razak and government officials from Abu Dhabi and 1MDB officials would 
receive money from the proceeds of Project Maximus that passed through various shell companies 
beneficially owned and controlled by himself, Low and others.  Moreover, along with Low and 
others, it was Leissner’s intended purpose that the payments were to flow to these government 
officials to influence the officials to execute the bond transaction with Goldman Sachs.  A close 
relative of Najib Razak and a senior official with the Middle Eastern Sovereign Wealth Fund, 
among others, received some of these funds. 
 
40. Some of the proceeds from Project Maximus were transferred by or per Low to 
Leissner in furtherance of the scheme.  Thereafter, Leissner, Low and others caused some of these 
funds to be transferred to the accounts of 1MDB officials or relatives of such officials, or to the 
accounts of shell companies beneficially owned by 1MDB officials, in exchange for their 
assistance in obtaining and retaining business for Goldman Sachs. 
 
41. Goldman Sachs’s books and records relating to the Maximus bond offering failed to 
accurately reflect key aspects of the transaction, including the involvement of a third-party 
intermediary. 
 
Goldman Sachs Obtains Project Catalyze from 1MDB 
 
42. In November 2012, despite having raised over $3 billion in the prior 11 months, 
1MDB sought to raise an additional $3 billion through a bond issuance known internally at 
Goldman Sachs as “Project Catalyze.”  The stated purpose of this debt financing was to fund 

 
 
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1MDB’s portion of a joint venture with the Middle Eastern Investment Firm.  Goldman Sachs was 
engaged to underwrite the project in or around early 2013.  The Project Catalyze bond offering 
ultimately issued on March 19, 2013, resulting in a further approximately $186 million for 
Goldman Sachs from the deal.   
 
43. As they had with the two prior 1MDB bond issuances, Leissner and other Goldman 
Sachs employees continued to work on deals where Low was an intermediary between Goldman 
Sachs, 1MDB officials, Najib Razak and other Malaysian government officials.  A portion of the 
approximately $3 billion raised by Project Catalyze was transferred to Leissner by or at the 
direction of Low. 
 
44. Goldman Sachs’s books and records relating to the Catalyze bond offering failed to 
accurately reflect key aspects of the transaction, including the involvement of a third-party 
intermediary 
 
Goldman Sachs Obtains Further Business from Jho Low Post-Catalyze 
 
45. During and after the 1MDB Bond Deals, Goldman Sachs pursued additional 
business opportunities involving Low, such as the restructuring of an investment by the Middle 
Eastern Investment Firm in a Malaysian bank with Low as “an advisor” to the Company’s client, 
and Low’s acquisition of an oil company through a joint venture with a subsidiary of the Middle 
Eastern Sovereign Wealth Fund (“Project Condor”).   These transactions involved not only Low, 
but also two officials from Abu Dhabi whom Low and others had recently bribed in connection 
with the Bond Deals. 
 
46. Leissner and other Goldman Sachs employees failed to disclose Low’s involvement 
in Project Condor to the firm’s Intelligence Group for approximately ten months.  In October 2013, 
Leissner sought internal approval for Goldman Sachs to advise Low’s business entity as a client.  
Goldman Sachs Intelligence Group personnel informed Leissner that the firm could not advise 
Low’s business entity.  Leissner and other senior Goldman Sachs employees completed the 
transaction, with Low as a minority co-investor alongside the Middle Eastern Sovereign Wealth 
Fund subsidiary that was the Company’s client.  When Project Condor ultimately closed in January 
2014, the deal was structured with Low’s business entity contributing a minor percentage of the 
necessary capital and the Middle Eastern Sovereign Wealth Fund subsidiary responsible for the 
remainder.  The transaction resulted in approximately $10 million for Goldman Sachs.   
 
Goldman Sachs’s Failure to Maintain Adequate Internal Accounting Controls 
 
47. Goldman Sachs failed to maintain a sufficient system of internal accounting 
controls between 2012 and 2015 with respect to the process by which it reviewed and approved the 
commitment of firm capital in large, significant and complex transactions, such as the Bond Deals.  
This resulted in Goldman Sachs’s failing to reasonably assure adequate documentation of the GS 
Capital Committee’s processes, including follow-up, oversight and documentation regarding due 
diligence of concerns raised by the GS Capital Committee regarding the Bond Deals.  Under the 
Company’s policy, the GS Capital Committee was intended to serve a vital control function with 

 
 
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regard to significant commitments in firm capital.  Goldman Sachs initiated enhancements to its 
processes with respect to committee documentation in 2015. 
 
48. Each of the three Bond Deals was submitted to the GS Capital Committee, and as 
was typical practice at the firm, the GS Capital Committee transaction review took place in stages.  
The Committee’s approvals were granted conditionally, meaning that further action steps were 
needed – typically by the deal team – to address open items or conduct due diligence on significant 
concerns raised during the GS Committee process before approval of a given transaction would 
become effective.  Follow-up was required on a number of items for the Bond Deals, including the 
Middle Eastern Sovereign Wealth Fund guarantee on the first Bond Deal.       
 
49. Goldman Sachs’s Debt Underwriting Group had responsibility for confirming that 
follow-up items were completed prior to a deal closing.  However, due to weaknesses in the 
implementation of this control, the results of this follow-up were not documented consistent with 
the GS Capital Committee providing its vital control function. 
 
LEGAL STANDARDS AND VIOLATIONS 
 
50. Under Section 21C(a) of the Exchange Act, the Commission, after making certain 
required findings, may impose a cease-and-desist order upon any person who is violating, has 
violated, or is about to violate any provision of the Exchange Act or any rule or regulation 
thereunder, and upon any other person that is, was, or would be a cause of the violation, due to an 
act or omission the person knew or should have known would contribute to such violation.   
 
Goldman Sachs Violated Exchange Act Section 30A 
 
51. The anti-bribery provisions of the FCPA, Section 30A of the Exchange Act, make it 
unlawful for  any issuer with a class of securities registered pursuant to Section 12 of the Exchange 
Act, or any employee or agent of such issuer,  to make use of the mails or any means or 
instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to 
pay, or authorization of the payment of any money, or offer, gift or promise to give anything of 
value to any foreign official for purposes of influencing any act or decision of such foreign official 
in his official capacity in order to assist such issuer in obtaining or retaining business for or with 
any person.  15 U.S.C. § 78dd-1.  As a result of the conduct described above regarding payments to 
government officials, Goldman Sachs violated Exchange Act Section 30.   
 
Goldman Sachs Violated Exchange Act Section 13(b)(2)(A) 
 
52. The books and records provision of the FCPA, Section 13(b)(2)(A) of the Exchange 
Act, requires every issuer with a class of securities registered pursuant to Section 12 of the 
Exchange Act to make and keep books, records, and accounts, which, in reasonable detail, 
accurately and fairly reflect the transactions and dispositions of the assets of the issuer.  15 U.S.C. 
§ 78m(b)(2)(A).  As described above, Goldman Sachs’s books and records did not accurately 
reflect key aspects of the Bond Deals.  By this conduct Goldman Sachs violated Exchange Act 
Section 13(b)(2)(A).   
 

 
 
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Goldman Sachs Violated Exchange Act Section 13(b)(2)(B) 
 
53. Section 13(b)(2)(B) of the Exchange Act requires companies with a class of 
securities registered under Section 12 of the Exchange Act to devise and maintain a system of 
internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 
executed in accordance with management’s general or specific authorization; (ii) transactions are 
recorded as necessary (I) to permit preparation of financial statements in conformity with generally 
accepted accounting principles or any other criteria applicable to such statements, and (II) to 
maintain accountability for assets; (iii) access to assets is permitted only in accordance with 
management’s general or specific authorization; and (iv) the recorded accountability for assets is 
compared with the existing assets at reasonable intervals and appropriate action is taken with 
respect to any differences.  15 U.S.C. § 78m(b)(2)(B).  As described above, Goldman Sachs failed 
to implement a system of internal accounting controls sufficient to provide reasonable assurances 
that transactions were executed in accordance with management’s general or specific authorization 
and that access to assets was permitted only in accordance with management’s general or specific 
authorization.  By this conduct, Goldman Sachs violated Exchange Act Section 13(b)(2)(B). 
 
Criminal and Other Regulatory Dispositions 
 
54. Respondent has entered into a deferred prosecution agreement with the Department 
of Justice that acknowledges responsibility for criminal conduct relating to certain findings in the 
Order.   
 
55. Respondent has also entered into a parallel civil settlement with the Board of 
Governors of the Federal Reserve System (the “Federal Reserve Board”) concerning some of the 
findings in the Order.   
 
IV. 
 
In view of the foregoing, the Commission deems it appropriate and in the public interest 
to impose the sanctions agreed to in Respondent’s Offer. 
 
Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED 
that: 
 
A. Respondent Goldman Sachs cease and desist from committing or causing any 
violations and any future violations of Sections 30A, 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(2)(B), 
and 78dd-1]; 
 
B. Respondent Goldman Sachs shall pay to the Commission disgorgement of 
$606,300,000, which shall be deemed satisfied by the payment previously made 
to the Government of Malaysia and 1MDB pursuant to a parallel Settlement 
Agreement entered into by Goldman Sachs on August 18, 2020;  
 
C. Respondent shall, within 21 days of the entry of this Order, pay a civil money 
penalty in the amount of $400,000,000 to the Securities and Exchange 

 
 
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Commission for transfer to the general fund of the United States Treasury, 
subject to Exchange Act Section 21F(g)(3).  If timely payment is not made, 
additional interest shall accrue pursuant to 31 U.S.C. §3717; and 
 
D. Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying The 
Goldman Sachs Group, Inc. as the Respondent in these proceedings, and the file number of these 
proceedings; a copy of the cover letter and check or money order must be sent to Charles Cain, 
FCPA Unit Chief, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 
Washington, DC 20549.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
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E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax 
purposes.  To preserve the deterrent effect of the civil penalty, Respondent agrees 
that in any Related Investor Action, it shall not argue that it is entitled to, nor shall 
it benefit by, offset or reduction of any award of compensatory damages by the 
amount of any part of Respondent’s payment of a civil penalty in this action 
(“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final 
order granting the Penalty Offset, notify the Commission’s counsel in this action 
and pay the amount of the Penalty Offset to the Securities and Exchange 
Commission.  Such a payment shall not be deemed an additional civil penalty and 
shall not be deemed to change the amount of the civil penalty imposed in this 
proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or 
more investors based on substantially the same facts as alleged in the Order 
instituted by the Commission in this proceeding. 
 
By the Commission. 
 
 
 
Vanessa A. Countryman
 
Secretary 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 90243 / October 22, 2020 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 4191 / October 22, 2020 

ADMINISTRATIVE PROCEEDING 

File No. 3-20132 

In the Matter of 

THE GOLDMAN SACHS 

GROUP, INC., 

Respondent. 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER 

I. 

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 

21C of the Securities Exchange Act of 1934 (“Exchange Act”), against The Goldman Sachs 

Group, Inc. (“Goldman Sachs” or “Respondent” or the “Company”). 

II. 

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, Respondent admits the Commission’s 

jurisdiction over it and the subject matter of these proceedings, and consents to the entry of this 

Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities 

Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set 

forth below.    



 

 

2 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  

 

SUMMARY 

 

1. This matter relates to a scheme perpetrated by now former senior employees of 

Goldman Sachs who authorized and paid bribes and kickbacks to government officials in Malaysia 

and the Emirate of Abu Dhabi (“Abu Dhabi”) in order to secure lucrative business for the 

Company and benefits for themselves.  Goldman Sachs violated the antibribery, books and records 

and internal accounting controls provisions of the Foreign Corrupt Practices Act (“FCPA”) in 

connection with the scheme. 

 

2. 1Malaysia Development Berhad (“1MDB”) is a Malaysian state-owned and 

controlled investment fund created to pursue projects for the economic benefit of Malaysia and its 

people.  Between approximately 2009 and 2014, as 1MDB raised capital to fund its projects, 

billions of dollars were diverted from 1MDB.  The diverted funds included a substantial portion of 

the approximately $6.5 billion in capital that 1MDB raised in 2012 and 2013 through three bond 

offerings that it executed with Goldman Sachs (the “Bond Deals”).  As part of the scheme, certain 

former senior employees of Goldman Sachs authorized and paid bribes to government officials in 

Malaysia and in Abu Dhabi to obtain and retain lucrative business for Goldman Sachs, including 

the 2012 and 2013 bond deals, from which Goldman Sachs earned approximately $600 million. 

 

Respondent 

 

3. The Goldman Sachs Group, Inc. is a U.S. based global investment banking, 

securities, and investment management firm headquartered in New York, New York.  The 

common stock of the Company is registered pursuant to Section 12(b) of the Exchange Act and is 

listed for trading on the New York Stock Exchange under the stock symbol “GS.”  The Company 

is and was an “issuer” within the meaning of the Foreign Corrupt Practices Act (“FCPA”) during 

the relevant period. 

 

Related Entities and Individuals 
 

4. 1MDB was a strategic investment and development company wholly-owned by the 

Malaysian government through the Malaysian Ministry of Finance.  It was formed in 2009 when 

the Malaysian government took control of a municipal entity called Terengganu Investment 

Authority (“TIA”).  1MDB was created to pursue investment and development projects for the 

economic benefit of Malaysia and its people, primarily relying on debt to fund these investments.  

1MDB’s development projects were focused in the areas of energy, real estate, tourism and 

agribusiness.  1MDB was overseen by senior Malaysian government officials, was controlled by 

the Malaysian government, and performed a government function on behalf of Malaysia.   

 

                                                
1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other 

person or entity in this or any other proceeding.  

 



 

 

3 

5. The Middle Eastern Sovereign Wealth Fund was an investment fund wholly-

owned by the government of Abu Dhabi.  It was established by the government of Abu Dhabi 

pursuant to an Emiri Decree in or around 1984 with a mandate to advance Abu Dhabi’s natural 

petroleum wealth for the development of the emirate.  The Middle Eastern Sovereign Wealth Fund 

was overseen by senior Abu Dhabi government officials, was controlled by the Abu Dhabi 

government, which appointed all the members of the Middle Eastern Sovereign Wealth Fund’s 

board of directors, and performed a government function on behalf of Abu Dhabi. 

 

6. The Middle Eastern Investment Firm, a subsidiary of the Middle Eastern 

Sovereign Wealth Fund, was a private joint stock company incorporated under the laws of Abu 

Dhabi.   

 

7. Tim Leissner, age 51, was employed by Goldman Sachs between 1998 and 

February 2016.  Prior to his separation from Goldman Sachs, Leissner was a participating 

managing director (or “partner”), vice chairman of Investment Banking in Asia Ex-Japan, and 

chairman of South East Asia.  Leissner was a banker with relationship management responsibility 

for various clients in the Asia Ex-Japan region, including 1MDB.   

 

8. Jho Low, age 38, is a Malaysian national who advised on the creation of TIA, 

1MDB’s predecessor entity.  Jho Low has never held a formal position at 1MDB.  Jho Low 

nevertheless exercised significant control over 1MDB during the time period relevant to the Order.  

Jho Low worked as a finder and intermediary in relation to 1MDB officials and other government 

officials on a number of financial transactions and projects involving Goldman Sachs.  

 

9. Roger Ng, age 47, is a Malaysian national who was employed as a Managing 

Director and acted as an agent of Goldman Sachs.  He worked with Leissner at Goldman Sachs 

from approximately 2009 to May 2014.   

 

10. Najib Razak, age 67, was the Prime Minister of Malaysia from 2009 to 2018 who 

held a position of authority with 1MDB.  

 

FACTS 

 

Background 

11. 1MDB was formed in or around 2009, when the Malaysian government asserted 

federal control over TIA, which previously had been a development fund controlled by the 

Malaysian state of Terengganu.  

 

12. 1MDB was created for the stated purpose of pursuing investment projects for the 

economic benefit of Malaysia and its people, relying mainly on debt to support these projects.  

1MDB was supervised by senior Malaysian government officials, controlled by the Malaysian 

government, and performed a government function on behalf of Malaysia.  Upon 1MDB’s 

formation, Najib Razak assumed a position of authority with 1MDB.  Najib Razak had the 

authority to approve all appointments to, and removals from, 1MDB’s Board of Directors and 

1MDB’s Senior Management Team.  In addition, any financial commitments by 1MDB, including 

investments, that were likely to affect a guarantee given by the government of Malaysia for the 



 

 

4 

benefit of 1MDB or any policy of the Malaysian government, required the approval of Najib 

Razak. 

 

Malaysian Intermediary Jho Low 

 

13. Low, a Malaysian national with close ties to senior Malaysian government officials, 

had advised on the creation of TIA, 1MDB’s predecessor entity in 2009.  Thereafter, he continued 

to act as an intermediary or finder for 1MDB in relation to a number of financial transactions and 

projects, including those involving Goldman Sachs.  

  

14. Goldman Sachs, through its participating managing director Leissner, was retained 

to provide financial advice to the government of Malaysia on the same TIA project in 2009 

(“Project Tiara”).  Certain senior Goldman Sachs employees, including at least Leissner and Ng, 

knew that Low worked as a finder and intermediary in relation to TIA at the time of Project Tiara.  

Leissner and Ng would later work to conceal Low’s involvement in Goldman-related transactions 

from others at the Company.  They did so knowing that Low remained close to 1MDB officials 

and other government officials in Malaysia, including Najib Razak, and Abu Dhabi.   

 

Goldman Sachs’s Anti-Corruption Program and Deal Approval Process 

 

15. Goldman Sachs had a general anti-corruption policy (including both a written 

Statement of Principles Regarding Anti-Bribery and related policies and procedures, collectively 

the “Anti-Bribery Policy”) applicable to all employees that expressly prohibited improper 

payments to government officials intended to obtain or retain business for the company.  Goldman 

Sachs’s Anti-Bribery Policy was overseen and enforced by its compliance function (the 

“Compliance Group”) and its Business Intelligence Group (the “Intelligence Group”).   

 

16. In addition to the Anti-Bribery Policy aspects of Goldman Sachs’s system of 

internal accounting controls, including the committee review process, were intended to help ensure 

that transactions were executed in accordance with management’s wishes.  The Compliance Group 

and the Intelligence Group worked with, and as part of, various Goldman Sachs committees (“GS 

Committees”) in reviewing transactions.  

 

17. Goldman Sachs’s role as underwriter for the Bond Deals meant that the firm would 

be using its own capital to fund the initial purchase of the 1MDB bonds.  Accordingly, the 

transactions were formally reviewed and approved by multiple GS Committees including the 

Firmwide Capital Committee (“GS Capital Committee”).  The GS Capital Committee’s charter 

states as follows:   

 

The Committee provides approval and oversight globally of debt-related 

transactions, including principal commitments of the Firm’s capital. The 

Committee aims to ensure that business, reputational and suitability standards for 

underwritings and capital commitments are maintained on a global basis.   

 

18. The GS Committees played a critical role in the chain of management approvals 

necessary for transactions such as the Bond Deals to be consummated.  At the time of the Bond 



 

 

5 

Deals, transactions could be granted conditional approval by the GS Capital Committee, provided 

there was further follow-up on specified issues prior to deal execution.  In terms of recordkeeping 

and documentation, the principal inputs to the GS Capital Committee were the internal memoranda 

prepared by deal team members under the supervision of senior employees such as Leissner, and 

the principal outputs were written meeting minutes that should record the GS Capital Committee’s 

decisions and set forth any prerequisite follow-up items.   

 

Early Attempts To Do Business With Jho Low 

 

19. Following the successful establishment of 1MDB in 2009, Leissner and Ng 

supported at least three separate attempts to make Low a formal client of Goldman Sachs.  These 

efforts took place between September 2009 and March 2011.  Leissner and Ng supported them 

because, in part, they believed that Low would work to deliver lucrative business deals, including 

from 1MDB, for the benefit of Goldman Sachs.   

 

20. These attempts were unsuccessful because certain personnel within Goldman 

Sachs’s Compliance Group and Intelligence Group refused to approve any client relationship with 

Low based, in part, on concerns that these groups had concerning the source of Low’s wealth.  

Personnel within the Compliance Group and the Intelligence Group communicated the rejection of 

Low’s client application to Leissner and others within Goldman Sachs.  

 

21. For example, in early 2011, another Goldman Sachs senior employee was aware 

that Leissner and Ng attempted to advise a business controlled by Low.  This proposed 

engagement was declined following concerns raised by the Intelligence Group regarding Low and 

his source of wealth, among other things.  Thus, the other Goldman Sachs senior employee was 

aware that the Intelligence Group was unlikely to approve proposed Goldman Sachs business 

involving Low.  

 

22. Notwithstanding Leissner, Ng and the other senior employee’s knowledge of the 

concerns that had been raised about Low not being a suitable client for Goldman Sachs, they 

continued to work with Low based upon their belief that Low would help ensure that government 

officials in Malaysia and Abu Dhabi would deliver lucrative business deals to Goldman Sachs. 

 

The Bond Deals 

 

23. Goldman Sachs was subsequently retained by 1MDB in 2012 and 2013 to assist it 

with three large debt financings – “the Bond Deals.”  Leissner and other employees of Goldman 

Sachs knew that Low was playing a central role in these transactions, including by acting as an 

intermediary between Goldman Sachs, 1MDB and other Malaysian and Abu Dhabi government 

officials.  Leissner and Ng also knew that Low promised to pay bribes and kickbacks to these 

officials to secure 1MDB business for Goldman Sachs.   

 

24. Throughout 2012 and 2013, Leissner and Ng actively worked to obtain and retain 

business from 1MDB for the benefit of Goldman Sachs through the promise and payment of bribes 

and kickbacks to government officials in Malaysia and Abu Dhabi using, in part, misappropriated 

and embezzled proceeds from the Bond Deals.  During this time, through the course of the scheme, 



 

 

6 

Leissner, Low and others paid millions of dollars in bribes and kickbacks to government officials, 

and secured 1MDB business for Goldman Sachs, in particular, the three Bond Deals and related 

transactions.  These three bond financing transactions were referred to internally at Goldman Sachs 

as “Project Magnolia,” “Project Maximus” and “Project Catalyze.”  

 

25. Although the purported purpose of the approximately $6.5 billion raised by the 

three bond transactions was to support 1MDB projects for the benefit of the Malaysian people, 

Leissner, Low and others instead planned and executed a scheme to misappropriate more than $2.7 

billion and distribute the money as bribes and kickbacks to government officials in Malaysia and 

Abu Dhabi, including but not limited to Najib Razak, as well as benefits to other participants in the 

scheme and their families, including Leissner. 

 

Goldman Sachs Obtains Project Magnolia from 1MDB 

 

26. On at least two occasions in early 2012, senior employees of Goldman Sachs met 

with Low and 1MDB officials to discuss 1MDB’s proposed purchase of a Malaysian energy 

company, Tanjong Energy Holdings Sdn Bhd, (“Tanjong”) and Goldman Sachs’s preparedness to 

help obtain financing for the purchase.  This financing transaction was known as “Project 

Magnolia,” which ultimately closed in May 2012, earning approximately $193 million for 

Goldman Sachs.  

 

27. During these early-2012 meetings in Malaysia and London, according to Leissner, 

the attendees discussed with Low the type of financial guarantee that 1MDB needed to obtain for 

the bond issuance to meet Goldman Sachs’s underwriting requirements.  They ultimately agreed on 

a guarantee from Abu Dhabi’s Middle Eastern Sovereign Wealth Fund.  During this time and 

afterward, Leissner and other senior employees of Goldman Sachs understood that Low was acting 

as an intermediary between 1MDB, Najib Razak and other government officials from Abu Dhabi. 

 

28. During a meeting in London in February 2012, Low explained that in order to 

secure the guarantee from the Middle Eastern Sovereign Wealth Fund they would have to pay 

bribes and kickbacks to government officials, including to certain officials in Malaysia and Abu 

Dhabi.  After the February 2012 meeting, Leissner, Ng and another senior employee of Goldman 

Sachs discussed this information.    

 

29. In March 2012, 1MDB formally engaged Goldman Sachs to be the sole underwriter 

for the $1.75 billion debt financing transaction designed, in part, to pay for the acquisition of 

Tanjong, which was guaranteed by the Middle Eastern Sovereign Wealth Fund.   

 

30. Shortly thereafter in March 2012, Leissner  and other employees of Goldman Sachs 

met in Abu Dhabi with Low and certain 1MDB officials and officials of the Middle Eastern 

Sovereign Wealth Fund and the Middle Eastern Investment Firm to discuss the contemplated 

guarantee for Project Magnolia.  Throughout that time, senior employees of Goldman Sachs, 

including Leissner, knew Low had arranged the meetings with the officials of the Middle Eastern 

Sovereign Wealth Fund and its subsidiary, the Middle Eastern Investment Firm, and Leissner and 

Ng also knew that some of these officials, among others, would be paid bribes by Low to secure 

the guarantee.  



 

 

7 

 

31. Leissner, Ng and another senior employee of Goldman Sachs also knew that Low 

would pay bribes and kickbacks to influence Malaysian officials to obtain the necessary approvals 

to execute Project Magnolia for Goldman Sachs.  During the months leading up to the issuance of 

the Project Magnolia bonds, Leissner knew that Low enlisted 1MDB officials to assist him in 

ensuring that all necessary approvals were obtained from 1MDB officials and others to complete 

the transaction, in exchange for bribes and kickbacks to those 1MDB officials. 

 

32. In April 2012, before the closing of Project Magnolia, Leissner and other members 

of the deal team participated in a GS Committee meeting that included many senior Goldman 

Sachs executives participating from multiple locations globally, including New York City, New 

York.  The meeting was convened for the purpose of approving Goldman Sachs’s potential 

commitment of capital in Project Magnolia.  During the meeting, Leissner was directly asked 

whether Low was involved in Project Magnolia.  Leissner told the GS Committee that Low was 

not involved in Project Magnolia, though he and other senior employees of Goldman Sachs knew 

at the time that this statement was false.   

 

33. In late May 2012, near the closing of Project Magnolia, Leissner actively worked 

with Ng and Low to divert some of the bond proceeds that Goldman Sachs raised from Project 

Magnolia into the bank accounts of shell companies that Leissner, Ng and Low beneficially owned 

and controlled.  These individuals each understood and expected to keep some of the diverted 

funds for their personal use, and that other funds would be used to pay bribes and kickbacks to 

government officials in Malaysia and Abu Dhabi and elsewhere in exchange for their assistance in 

obtaining and retaining business for Goldman Sachs in connection with Project Magnolia. 

 

34. Goldman Sachs transferred the proceeds of the Magnolia bond offering via wire to 

the 1MDB entity designated to receive the payment.  At the time, Leissner, Low and others knew 

that a large portion of the proceeds of the bond offering would be diverted to themselves and 

others, including government officials, through shell companies beneficially owned and controlled 

by Low, Leissner and others.   

 

35. Goldman Sachs’s books and records relating to the Magnolia bond offering failed 

to accurately reflect key aspects of the transaction, including the involvement of a third-party 

intermediary. 

 

36. Within three months of the May 2012 closing of Project Magnolia, millions of 

dollars of bond proceeds were transferred through shell companies beneficially owned and 

controlled by Low and other participants in the scheme into a Hong Kong bank account in the 

name of shell companies incorporated in the British Virgin Islands and controlled by Leissner.  

Leissner used a portion of these funds for his personal use and enjoyment.  Leissner also knew that 

other of the bond proceeds from Project Magnolia were transferred through shell company 

accounts beneficially owned and controlled by Low and other participants in the scheme and 

ultimately into accounts of shell companies beneficially owned and controlled by Abu Dhabi 

government officials with influence over the transaction. 

 

 



 

 

8 

Goldman Sachs Obtains Project Maximus from 1MDB 

 

37. In May 2012, Goldman Sachs began to plan a second bond transaction, known 

internally as “Project Maximus.”  It was designed, in part, to raise capital for 1MDB to purchase a 

second Malaysian power generation company, Genting Berhad (“Genting”).  The mandate to 

underwrite this bond offering was awarded by 1MDB to Goldman Sachs, and it was structured 

similarly to the first bond issuance but with an indirect guarantee from the Middle Eastern 

Sovereign Wealth Fund.  Project Maximus ultimately closed on or about October 19, 2012, raising 

approximately $1.75 billion for the designated 1MDB entity and resulting in approximately $188 

million for Goldman Sachs.  This was six months after the close of Project Magnolia.  All told, in 

these two 2012 transactions, 1MDB issued a total of $3.5 billion in bonds that were underwritten 

by Goldman and guaranteed by the Middle Eastern Sovereign Wealth Fund. 

 

38. Leissner and Ng understood and intended that Low and others would pay bribes 

and kickbacks to influence Malaysian and Abu Dhabi officials to obtain the necessary approvals to 

execute the Project Maximus bond offering.  Although the Middle Eastern Sovereign Wealth Fund 

did not provide a direct financial guarantee of the Project Maximus bonds as it had with Project 

Magnolia, it nevertheless agreed to provide an indirect guarantee.  As with Project Magnolia, 

Leissner and Ng continued to work with Low to acquire this business for Goldman Sachs.  

  

39. Leissner and Ng knew that a large portion of the proceeds of Project Maximus 

would be illegally diverted to themselves and others, including government officials, through shell 

companies beneficially owned and controlled by Leissner and others.  Leissner also knew at the 

time that Najib Razak and government officials from Abu Dhabi and 1MDB officials would 

receive money from the proceeds of Project Maximus that passed through various shell companies 

beneficially owned and controlled by himself, Low and others.  Moreover, along with Low and 

others, it was Leissner’s intended purpose that the payments were to flow to these government 

officials to influence the officials to execute the bond transaction with Goldman Sachs.  A close 

relative of Najib Razak and a senior official with the Middle Eastern Sovereign Wealth Fund, 

among others, received some of these funds. 

 

40. Some of the proceeds from Project Maximus were transferred by or per Low to 

Leissner in furtherance of the scheme.  Thereafter, Leissner, Low and others caused some of these 

funds to be transferred to the accounts of 1MDB officials or relatives of such officials, or to the 

accounts of shell companies beneficially owned by 1MDB officials, in exchange for their 

assistance in obtaining and retaining business for Goldman Sachs. 

 

41. Goldman Sachs’s books and records relating to the Maximus bond offering failed to 

accurately reflect key aspects of the transaction, including the involvement of a third-party 

intermediary. 

 

Goldman Sachs Obtains Project Catalyze from 1MDB 

 

42. In November 2012, despite having raised over $3 billion in the prior 11 months, 

1MDB sought to raise an additional $3 billion through a bond issuance known internally at 

Goldman Sachs as “Project Catalyze.”  The stated purpose of this debt financing was to fund 



 

 

9 

1MDB’s portion of a joint venture with the Middle Eastern Investment Firm.  Goldman Sachs was 

engaged to underwrite the project in or around early 2013.  The Project Catalyze bond offering 

ultimately issued on March 19, 2013, resulting in a further approximately $186 million for 

Goldman Sachs from the deal.   

 

43. As they had with the two prior 1MDB bond issuances, Leissner and other Goldman 

Sachs employees continued to work on deals where Low was an intermediary between Goldman 

Sachs, 1MDB officials, Najib Razak and other Malaysian government officials.  A portion of the 

approximately $3 billion raised by Project Catalyze was transferred to Leissner by or at the 

direction of Low. 

 

44. Goldman Sachs’s books and records relating to the Catalyze bond offering failed to 

accurately reflect key aspects of the transaction, including the involvement of a third-party 

intermediary 

 

Goldman Sachs Obtains Further Business from Jho Low Post-Catalyze 

 

45. During and after the 1MDB Bond Deals, Goldman Sachs pursued additional 

business opportunities involving Low, such as the restructuring of an investment by the Middle 

Eastern Investment Firm in a Malaysian bank with Low as “an advisor” to the Company’s client, 

and Low’s acquisition of an oil company through a joint venture with a subsidiary of the Middle 

Eastern Sovereign Wealth Fund (“Project Condor”).   These transactions involved not only Low, 

but also two officials from Abu Dhabi whom Low and others had recently bribed in connection 

with the Bond Deals. 

 

46. Leissner and other Goldman Sachs employees failed to disclose Low’s involvement 

in Project Condor to the firm’s Intelligence Group for approximately ten months.  In October 2013, 

Leissner sought internal approval for Goldman Sachs to advise Low’s business entity as a client.  

Goldman Sachs Intelligence Group personnel informed Leissner that the firm could not advise 

Low’s business entity.  Leissner and other senior Goldman Sachs employees completed the 

transaction, with Low as a minority co-investor alongside the Middle Eastern Sovereign Wealth 

Fund subsidiary that was the Company’s client.  When Project Condor ultimately closed in January 

2014, the deal was structured with Low’s business entity contributing a minor percentage of the 

necessary capital and the Middle Eastern Sovereign Wealth Fund subsidiary responsible for the 

remainder.  The transaction resulted in approximately $10 million for Goldman Sachs.   

 

Goldman Sachs’s Failure to Maintain Adequate Internal Accounting Controls 

 

47. Goldman Sachs failed to maintain a sufficient system of internal accounting 

controls between 2012 and 2015 with respect to the process by which it reviewed and approved the 

commitment of firm capital in large, significant and complex transactions, such as the Bond Deals.  

This resulted in Goldman Sachs’s failing to reasonably assure adequate documentation of the GS 

Capital Committee’s processes, including follow-up, oversight and documentation regarding due 

diligence of concerns raised by the GS Capital Committee regarding the Bond Deals.  Under the 

Company’s policy, the GS Capital Committee was intended to serve a vital control function with 



 

 

10 

regard to significant commitments in firm capital.  Goldman Sachs initiated enhancements to its 

processes with respect to committee documentation in 2015. 

 

48. Each of the three Bond Deals was submitted to the GS Capital Committee, and as 

was typical practice at the firm, the GS Capital Committee transaction review took place in stages.  

The Committee’s approvals were granted conditionally, meaning that further action steps were 

needed – typically by the deal team – to address open items or conduct due diligence on significant 

concerns raised during the GS Committee process before approval of a given transaction would 

become effective.  Follow-up was required on a number of items for the Bond Deals, including the 

Middle Eastern Sovereign Wealth Fund guarantee on the first Bond Deal.       

 

49. Goldman Sachs’s Debt Underwriting Group had responsibility for confirming that 

follow-up items were completed prior to a deal closing.  However, due to weaknesses in the 

implementation of this control, the results of this follow-up were not documented consistent with 

the GS Capital Committee providing its vital control function. 

 

LEGAL STANDARDS AND VIOLATIONS 

 

50. Under Section 21C(a) of the Exchange Act, the Commission, after making certain 

required findings, may impose a cease-and-desist order upon any person who is violating, has 

violated, or is about to violate any provision of the Exchange Act or any rule or regulation 

thereunder, and upon any other person that is, was, or would be a cause of the violation, due to an 

act or omission the person knew or should have known would contribute to such violation.   

 

Goldman Sachs Violated Exchange Act Section 30A 

 

51. The anti-bribery provisions of the FCPA, Section 30A of the Exchange Act, make it 

unlawful for  any issuer with a class of securities registered pursuant to Section 12 of the Exchange 

Act, or any employee or agent of such issuer,  to make use of the mails or any means or 

instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to 

pay, or authorization of the payment of any money, or offer, gift or promise to give anything of 

value to any foreign official for purposes of influencing any act or decision of such foreign official 

in his official capacity in order to assist such issuer in obtaining or retaining business for or with 

any person.  15 U.S.C. § 78dd-1.  As a result of the conduct described above regarding payments to 

government officials, Goldman Sachs violated Exchange Act Section 30.   

 

Goldman Sachs Violated Exchange Act Section 13(b)(2)(A) 

 

52. The books and records provision of the FCPA, Section 13(b)(2)(A) of the Exchange 

Act, requires every issuer with a class of securities registered pursuant to Section 12 of the 

Exchange Act to make and keep books, records, and accounts, which, in reasonable detail, 

accurately and fairly reflect the transactions and dispositions of the assets of the issuer.  15 U.S.C. 

§ 78m(b)(2)(A).  As described above, Goldman Sachs’s books and records did not accurately 

reflect key aspects of the Bond Deals.  By this conduct Goldman Sachs violated Exchange Act 

Section 13(b)(2)(A).   

 



 

 

11 

Goldman Sachs Violated Exchange Act Section 13(b)(2)(B) 

 

53. Section 13(b)(2)(B) of the Exchange Act requires companies with a class of 

securities registered under Section 12 of the Exchange Act to devise and maintain a system of 

internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 

executed in accordance with management’s general or specific authorization; (ii) transactions are 

recorded as necessary (I) to permit preparation of financial statements in conformity with generally 

accepted accounting principles or any other criteria applicable to such statements, and (II) to 

maintain accountability for assets; (iii) access to assets is permitted only in accordance with 

management’s general or specific authorization; and (iv) the recorded accountability for assets is 

compared with the existing assets at reasonable intervals and appropriate action is taken with 

respect to any differences.  15 U.S.C. § 78m(b)(2)(B).  As described above, Goldman Sachs failed 

to implement a system of internal accounting controls sufficient to provide reasonable assurances 

that transactions were executed in accordance with management’s general or specific authorization 

and that access to assets was permitted only in accordance with management’s general or specific 

authorization.  By this conduct, Goldman Sachs violated Exchange Act Section 13(b)(2)(B). 

 

Criminal and Other Regulatory Dispositions 

 

54. Respondent has entered into a deferred prosecution agreement with the Department 

of Justice that acknowledges responsibility for criminal conduct relating to certain findings in the 

Order.   

 

55. Respondent has also entered into a parallel civil settlement with the Board of 

Governors of the Federal Reserve System (the “Federal Reserve Board”) concerning some of the 

findings in the Order.   

 

IV. 

 

In view of the foregoing, the Commission deems it appropriate and in the public interest 

to impose the sanctions agreed to in Respondent’s Offer. 
 

Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED 

that: 
 

A. Respondent Goldman Sachs cease and desist from committing or causing any 

violations and any future violations of Sections 30A, 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(2)(B), 

and 78dd-1]; 

 

B. Respondent Goldman Sachs shall pay to the Commission disgorgement of 

$606,300,000, which shall be deemed satisfied by the payment previously made 

to the Government of Malaysia and 1MDB pursuant to a parallel Settlement 

Agreement entered into by Goldman Sachs on August 18, 2020;  

 

C. Respondent shall, within 21 days of the entry of this Order, pay a civil money 

penalty in the amount of $400,000,000 to the Securities and Exchange 



 

 

12 

Commission for transfer to the general fund of the United States Treasury, 

subject to Exchange Act Section 21F(g)(3).  If timely payment is not made, 

additional interest shall accrue pursuant to 31 U.S.C. §3717; and 

 

D. Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying The 

Goldman Sachs Group, Inc. as the Respondent in these proceedings, and the file number of these 

proceedings; a copy of the cover letter and check or money order must be sent to Charles Cain, 

FCPA Unit Chief, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 

Washington, DC 20549.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

http://www.sec.gov/about/offices/ofm.htm


 

 

13 

E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax 

purposes.  To preserve the deterrent effect of the civil penalty, Respondent agrees 

that in any Related Investor Action, it shall not argue that it is entitled to, nor shall 

it benefit by, offset or reduction of any award of compensatory damages by the 

amount of any part of Respondent’s payment of a civil penalty in this action 

(“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final 

order granting the Penalty Offset, notify the Commission’s counsel in this action 

and pay the amount of the Penalty Offset to the Securities and Exchange 

Commission.  Such a payment shall not be deemed an additional civil penalty and 

shall not be deemed to change the amount of the civil penalty imposed in this 

proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or 

more investors based on substantially the same facts as alleged in the Order 

instituted by the Commission in this proceeding. 

 

By the Commission. 

 

 

 

Vanessa A. Countryman 
Secretary