A senior Goldman Sachs Group Inc. executive left the firm after the Federal Reserve punished him for his role in a Malaysian corruption scandal that has tarnished Goldman’s reputation.
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The Fed on Tuesday said it had permanently barred Andrea Vella from the banking industry for his role in Goldman’s financing of a multibillion-dollar fraud involving 1Malaysia Development Bhd., a sovereign-wealth fund.
Mr. Vella left the firm in recent days, a person familiar with the matter said.
A lawyer for Mr. Vella said his client agreed to the ban, which does not require him to pay a fine or admit wrongdoing, “in order to move on to the next stage of his career and to avoid putting himself and his family through years of litigation.”
He said Mr. Vella did not know about any misdeeds alleged by prosecutors, who have described a sprawling web of kickbacks, bribes and outright theft.
Mr. Vella, a financial-structuring specialist who was once a rising star at the Wall Street bank, had been on paid leave since late 2018, when he was implicated–though not charged–by Justice Department prosecutors.
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He is the third senior Goldman banker named by the U.S. government in the 1MDB scandal, in which more than $4 billion was allegedly looted from the Malaysian government fund.
The investigation, now in its fourth year, has hung over the early tenure of Goldman’s chief executive, David Solomon.
The bank is negotiating to pay the Justice Department a fine of about $2 billion and plead guilty to violating antibribery laws, The Wall Street Journal has reported. Goldman socked away an extra $1.1 billion late last year to help pay for an expected settlement with regulators, who allege the bank overlooked signs of corruption at the Malaysian fund in pursuit of fees.
Tim Leissner, a Goldman partner, pleaded guilty in 2018 to stealing more than $200 million and paying bribes to government officials. Another Goldman banker is awaiting trial in the U.S. and Malaysia. Both are accused of conspiring with a Malaysian government adviser, Jho Low, to siphon off the proceeds of several bond sales that Goldman handled for 1MDB.
Italian-born Mr. Vella previously headed Goldman’s investment-banking operations in Asia. The Federal Reserve said he engaged in “unsafe and unsound practices,” failing to escalate internal concerns about Mr. Low, who had already set off red flags inside the firm.
“Low was a person of known concern to Goldman, and his involvement indicated heightened potential underwriting risks,” the Fed said in a statement. – WSJ