A major bank admits wrongdoing in $4.5 billion scam. But the bank’s chief blames it on a rogue employee, not on the bank itself

A brave British blogger should be getting the credit for exposing the scandal that led to the woes of the Goldman Sachs bank.  Her blog alleges serious criminality and likely prosecutions, if not the collapse, of this once gold-plated internationally-renowned bank.  Watch this space for the REAL story.

NEW YORK – Goldman Sachs chief executive David Solomon has apologised to the Malaysian people for the role of its chief Asia “partner” in a huge embezzlement scandal, involving a rip-off of at least 4.5 billion dollars of money from a State-financed fund set up in part ostensibly to protect the country’s fast-vanishing world-renowned oxygen-producing forests.

“Extraordinarily, he [Solomon] defended his bank then apologised to the people of Malaysia,” noted Lex who writes a column in the Financial Times, the most respected financial newspaper and website in the world. 

Solomon said that the blame was to be shouldered only by a former senior partner Tim Leissner, who has pleaded guilty in the USA to participating in the fraud.  It turns out Leissner was its senior representative for the whole of Asia.

“For Leissner’s role in that fraud, we apologise to the Malaysian people,” Solomon said during his first earnings call with analysts.

Goldman Sachs is being sued for billions and criminally prosecuted in Malaysia for its role in helping a Malaysian sovereign fund 1MDB to raise 6.5 billion dollars in debt. The effective controller of this fund, prime minister and finance minister Najib Razak, was toppled from power last year in a shock election defeat that has now opened up devastating lines of official inquiry. The Financial Times says much of that 6.5 billion dollars was allegedly “stolen or paid in bribes”.

“People here are extremely angry and upset about the fact that we have had a partner of the firm involved in such a significant fraud,” Solomon is quoted as telling analysts.

It seems to be the US Justice Department’s investigation that has spooked Solomon into his divert-the-blame ‘apology’.

Leissner is now apparently cooperating with the US authorities and is willing to spill some extremely damaging beans.  So much so that the bank, despite its claim of corporate innocence, has set aside a whopping 516 million dollar provision for litigation and regulatory matters.

Lex in the Financial Times says it is “telling” that Goldman Sachs has raised its legal reserves by 500 million dollars “in anticipation of fines or judgments”.

The New York Times had a much more detailed story about the shenanigans of Goldman Sachs and its potential liability.

The underlying facts behind this are even more startling. Watch this space.