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Goldman says previous Malaysia government lied; BNY Mellon to pay $54M


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Goldman says previous Malaysia government lied; BNY Mellon to pay $54M

Goldman Sachs Group Inc. spokesman Michael DuVally told Reuters that the previous Malaysian government had lied to Goldman about the use of the proceeds from the three 1Malaysia Development Bhd. bond transactions. He added that 1MDB gave the U.S. investment banking giant written assurances that no intermediaries were involved. DuVally's statement comes after Malaysia filed criminal charges against three Goldman subsidiaries over their roles in the 1MDB corruption and money laundering scandal.

Sources told The New York Times that days after the U.S. Justice Department charged former Goldman bankers Timothy Leissner and Roger Ng in November, Goldman's legal team appeared to make moves for a potential legal settlement by meeting with prosecutors from the DOJ's criminal division. Any settlement could include billions of dollars in penalties, according to the report. Sources also told the publication that the New York State Division of Financial Services recently sent subpoenas to around eight Goldman employees, who are part of the bank's so-called capital committee, asking them to appear for interviews in early 2019. Aside from the New York regulator, the Federal Reserve and the Securities and Exchange Commission will continue to pursue separate investigations of Goldman's role in the 1MDB fraud, according to the report.

Meanwhile, The Wall Street Journal reports that Goldman's gaps in compliance and push into Asia's emerging markets led it to ignore warning signs in its dealings with the 1MDB fund.

In bank regulatory news, Bank of New York Mellon Corp. agreed to pay more than $54 million to settle the U.S. Securities and Exchange Commission's charges over improper handling of pre-released American depositary receipts. BNY Mellon did not admit or deny the SEC's findings but agreed to pay more than $29.3 million in alleged ill-gotten gains, $4.2 million in prejudgment interest and a $20.5 million penalty.

More Brazilian companies are opting to tap the New York Stock Exchange or Nasdaq for their initial public offerings instead of local exchanges, Reuters reports, citing Refinitiv data. U.S. banks — led by Goldman, Morgan Stanley and Bank of America Corp.'s BofA Merrill Lynch — advised on 56% of Brazilian share offerings in 2018, compared with 29.7% in 2017. U.S. banks also earned a bigger portion of the $280 million in fees paid by Brazilian companies in 2018, compared with Brazilian banks, according to the report.

Fitzgerald, Ga.-based Colony Bankcorp Inc. is acquiring all of LaGrange, Ga.-based LBC Bancshares Inc.'s common stock in a cash-and-stock deal valued at approximately $34.1 million.

In fintech news, Backstop Solutions Group LLC, which provides cloud-based software solutions to institutional and alternative investors, is buying BarclayHedge Ltd., which provides alternative investment data and indices.

Tagomi Holdings Inc., an electronic brokerage for Bitcoin, Ether and other digital assets, has begun executing client trades. The brokerage has raised $16 million from investors, which include venture capital firm Founders Fund, Collaborative Fund and SV Angel.

In other parts of the world

Asia Pacific: CBL shareholder opposes liquidation; Bank of Baroda to close overseas branches

Europe: Saxo Bank to buy BinckBank for €424M; Bankia off-loads €3B of bad loans

Middle East & Africa: Diamond Bank confirms Access Bank merger deal; Moody's lifts Bahrain outlook

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The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng fell 1.05% to 25,814.25, and the Nikkei 225 dropped 1.82% to 21,115.45.

In Europe as of midday, the FTSE was down 0.39% to 6,746.86, and the Euronext 100 fell 0.30% to 929.32.

On the macro front

The housing starts report and the Redbook index for retail sales are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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