(L-R) Lloyd Blankfein and David Solomon attend the annual NYSCF Summer Cocktail Reception at the private residence in Sagaponack, NY on July 15, 2016.
Sean Zanni | Patrick McMullan | Getty Images
Goldman Sachs is endeavoring to reclaim compensation from current and former employees, including CEO David Solomon and former CEO Lloyd Blankfein, over the 1MDB scandal, or cut a total of $ 174 million.
The company on Thursday announced a comprehensive deal with U.S. authorities on its role in the 1MDB debacle, which saw a $ 6.5 billion Malaysian mutual fund looted with the help of some bank employees.
"The board sees the 1MDB matter as an institutional failure, which is inconsistent with high expectations for the company," the bank's directors said in a statement Thursday.
Goldman wants to reclaim $ 76 million from the three former employees who are most involved in the scandal, the bank's board of directors said Thursday. The names of the bankers are Timothy Leissner, Roger Ng and Andrea Vella.
In addition, five former executives, including Blankfein, were asked to repay long-term compensation of $ 67 million granted in 2011.
Finally, Solomon, its chief operating officer, chief financial officer, and international division head, will cut his compensation for 2020 by $ 31 million. These prizes will be paid out in February next year.
The punishment from the board of directors of the New York-based bank can be seen as confirmation that Goldman leaders had some responsibility for the episode. Top executives were on committees that reviewed the deals. Several outlets, including CNBC, have already reported on it.
Goldman bankers received approximately $ 600 million in fees in 2012 and 2013 to facilitate borrowing operations that were used to fund 1MDB. That amount was unusually high, according to fixed income experts. These deals ultimately resulted in approximately $ 5 billion in legal costs for the bank and $ 1.4 billion in asset guarantees for which the company is responsible.
From the start, Goldman has claimed that only two rogue employees were responsible for the bank's part in the 1MDB scandal, Leissner and Ng. Leissner pleaded guilty in 2018, while Ng maintained his innocence.
The 1MDB funds were reportedly used by Malaysian financier Low Taek Jho to fund an epic buying spree, including a $ 250 million yacht, a stake in the Martin Scorsese film "The Wolf of Wall Street," and real estate all over the place World.