To be a giant on Wall Street means to enjoy huge perks. Perks of just paying fines for any amount of mishandling of funds, outright fraud, manipulation or embezzlement, and walking away. In 149 years of Goldman Sachs history, you would rarely hear one or two individuals facing a prison term. The rest, you pay fines and go about your business. And if you are a Partner in the firm, you will be protected with an Army of lawyers provided and paid for by the firm itself.
History has repeatedly proven what I have written above. Fines as high as $15 billion were paid and all matters were hushed up when it came to the 2008 World Financial Crisis. People around the world lost their life savings due to the scheming investments offered by Goldman Sachs in the form of Sub-Prime Mortgages. Governments lost their pension funds for their citizens. Universities lost their endowment funds. Hospitals lost their employee benefit plans. But the ones who caused it or were the main reason of it being caused, Goldman Sachs and the likes of it, walked away unscathed.
Only to have their Partners’ bonuses increase after a brief pause of a year or two. Same private planes. Same $100 million and above bonuses for senior partners. Same Government deals. Same international underwriting syndicates. Everything was same and that same attitude lead Goldman Sachs to put together a conniving deal, but this time in Malaysia. Had the deal been put together in America, GS would have walked away, again with, just fines.
A $6 billion plus deal which was underwritten by GS for the Malaysian government’s 1MDB, 1 Malaysian Development Berhard, where Goldman made a minimum of $650 million dollars in fees for its services, was nothing but a front operation for money laundering and plundering the wealth of the Malaysian citizens in collaboration with the, then Malaysian PM, Najib Razak. The funds were sent out to destinations known for hiding laundered wealth. Movies were financed, Wolf Of Wall Street, being one. Najib’s wife’s expenses were paid out of it. To sum it up simply, it was the biggest and the most complicated scheme of fraud and deception, the world of international finance and investment banking as ever seen.
But Goldman Sachs missed to understand one thing this time. It was not America that they were pulling this fast one in. It was Malaysia and Mahathir was still alive. Nobody could have thought that he would come back to power and unearth this mega scam. Arrest PM Razak, initiate a worldwide investigation. Force the American authorities to open up an investigation as well. Arrest the high ups of Goldman Sachs in Malaysia. Force Executives of Goldman Sachs to offer the inside workings of the deal in return for lighter sentences. Nothing of this sort was ever expected by the executives of Goldman.
Goldman has survived many allegations. Many convictions. Many conspiracies. But this time it will not, in my view. I think this 1MDB will prove to be the straw that broke the camels’ back. Or perhaps will kill the whole Camel. Whatever the case might be, GS will not be able to survive its long enjoyed reputation. Which in turn will affect its revenue stream and that will lead to its stock being crushed. It will also dampen the investment banking activities around the world. Many more indictments of related companies and individuals will surface. The world of finance after this debacle will no longer be the same.
I think the time is here when the giants of Wall Street will no longer remain untouchables.
Author: Mir Mohammad AliKhan