Credit - Bloomberg
Goldman Sachs’s stock is on track to be the worst performer on the Dow Jones Industrial Average this year, down 37 per cent after falling another 4.6 per cent Friday.
Monday 24, December 2018
(Bloomberg)--Goldman Sachs Group Inc. Chief Executive Officer David Solomon defended the firm’s culture and oversight as the bank faces more fallout from a high-profile corruption probe that has spanned continents.
"We believe our culture and our processes around our due diligence and compliance was strong at the time and is even stronger today," Solomon said in a year-end message recorded for the firm’s employees. “While we understand the anger and scepticism, we do not believe that the criticism directed at us accurately reflects who we were then or who we are now.”
Solomon’s statement comes after Malaysia filed the first criminal charge against the bank in a global corruption probe that is examining its role in allegedly aiding a historic heist of a Malaysian investment fund known as 1MDB. The firm is already in the thick of investigations by US prosecutors and regulators over its conduct in the controversy.
Goldman Sachs’s stock is on track to be the worst performer on the Dow Jones Industrial Average this year, down 37 per cent after falling another 4.6 per cent Friday. With the recent slump, it’s now the only major US bank trading below its November 2016 level, when President Donald Trump’s election win sparked a rally in bank stocks across Wall Street.
Prosecutors from the US to Singapore and Malaysia are aggressively probing the firm’s role raising about $6.5 billion for 1MDB. The fallout has become its thorniest scandal since the financial crisis. Last month, the US Justice Department revealed that a former partner pleaded guilty to bribery charges, his deputy was arrested, and the firm put a top Asia banking executive on leave.
Solomon, who was the head of the investment-banking group at the time of the 1MDB fundraising, took over as CEO at the start of October. His predecessor, Lloyd Blankfein, remains as chairman through the end of December.
Solomon dedicated about half of his message to 1MDB, with the rest touching on the bank’s 2018 performance, growth initiatives and his thanks to Blankfein. Regarding the controversy, the CEO said the firm conducted detailed due diligence on the bond offerings, and the revenue from the deals reflected the risk the firm took.
“The firm’s record of asking tough questions and going the extra mile on all of our transactions, including 1MDB, is clear,” he said. “As to the facts of the 1MDB matter, there is a lot that I want to say but cannot say given the ongoing investigation.”