United States' Department of Justice staff have made an internal recommendation that Goldman Sachs Group Inc plead guilty as part of any potential settlement over its role in a corruption scandal involving a Malaysian sovereign wealth fund, theThe Justice Department has not charged Goldman in relation to the state-owned fund, 1Malaysia Development Berhad, known as 1MDB.
The Justice Department announced criminal charges against two former Goldman bankers tied to the scandal involving 1MDB, Tim Leissner and Roger Ng, last year. Banks with criminal convictions can lose access to certain government perks, including a streamlined process to raise funds through securities offerings and the ability to manage American pension funds. In the past, however, the DOJ has ensured that the relevant government regulators would grant waivers that would allow a bank to continue doing such business out of concern that a dramatic upheaval of a major firm could have a negatively affect markets.
But such a policy has been under political pressure from Democrats – including Representative Maxine Waters, who now chairs the House of Representative’s banking committee, and Senator Elizabeth Warren, a candidate for the Democratic nomination for president who argue that banks that plead guilty should suffer consequences.
"A guilty plea would not be 'game over,' in our view," Mike Mayo, senior analyst at Wells Fargo Securities, wrote in a note on Wednesday.
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