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05 February 2020

Goldman Sachs executive banned from banking over 1MDB scandal

The 1MDB conspiracy, in which a global cast of characters is accused of looting billions of dollars from the Malaysian government, has been a major embarrassment for Goldman Sachs

Other former Goldman employees have been criminally charged by the US Justice Department as a result of its investigation/Bloomberg

by Bloomberg

The Federal Reserve has permanently banned senior Goldman Sachs Group banker Andrea Vella from the industry over his alleged involvement in 1Malaysia Development Berhad (1MDB).

The Federal Reserve said that Vella, a former co-chair of Asian investment banking who was put on leave in 2018, failed to inform Goldman of potential illicit activity involving 1MDB bond offerings handled by the bank in 2012 and 2013.

Other former Goldman employees have been criminally charged by the US Justice Department as a result of its investigation. Vella has left the firm as part of a settlement with the Federal Reserve over the affair.

The Federal Reserve said that Vella engaged in unsafe and unsound practises by failing to ensure that all of Goldman’s internal committees were aware that the 1MDB deal involved Jho Low, who’s been accused of being the mastermind of the fraud.

Low’s involvement heightened potential underwriting risks and Goldman knew he was a person of concern, said the Federal Reserve.

Before Vella’s downfall, he had been Goldman’s top dealmaker in Hong Kong, helping structure 1MDB’s fundraising and then playing a key role in the firm’s initial review of what went wrong.

Similarly, Vella had been one of two executives overseeing investment banking for all of Asia except Japan.

Vella joined Goldman from JPMorgan Chase & Co. where his team had arranged a Greek bond deal in 2007 that left the country’s pension funds feeling cheated and triggered the ouster of its labour secretary. Vella went to Goldman soon after as a partner.


RELATED STORIES: Federal Reserve 1MDB JPMorgan Chase & Co. Andrea Vella





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