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Goldman Sachs back in controversy after 1MDB scandal- now with Kathryn Roemmler legal counsel at Goldman about her connections with Jeffrey Epstein. WSJ looks at these connections including documents relating to Epstein's will, where she is shown as successor Executor of the Will.

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Malaysia filed criminal charges against Goldman Sachs Group Inc. unit and a former partner in relation to the 1MDB financial scandal. Goldman arranged a $6.5 billion in bonds for 1MDB in 2012 and 2013 of which $2.7 billing was allegedly stolen, according to this report in the Wall Street Journal. The bank was able to make $600 million in profits. Malaysia's Attorney General stated that "Malaysia considers the allegations in the charges against the accused to be grave violations of our securities laws, and to reflect their severity, prosecutors will seek criminal fines against the accused well in excess of the $2.7 billion misappropriated from the bonds proceeds and $600 million in fees received by Goldman Sachs, and custodial sentences, the maximum term of imprisonment being 10 years." The 1MDB scandal was a major issue in recent Malaysian elections resulting in a return to government of Mahathir Mohammed in an attempt to restore integrity and transparency to the country's finances and spending. The Wall Street Journal has covered 1MDB as it did other issues relating to the 2008 financial crisis to ensure Asia's developing countries have good governance and financial integrity. 1MDB, Malaysia's development fund is now the centre of investigations by the U.S. Justice Department, Malaysia, Singapore, Switzerland, Luxembourg.   ...

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Peter Eavis describes the results of the new Federal Reserve LISCC's determination under Tarullo, Gibson and Taylor, to bring discipline to financial markets and reduce systemic risk. Over the last 3 years Goldman Sachs has spent $16.3 billion in buybacks, about 70% of profits, to return money to shareholders and improve metrics such as earnings per share. This strategy will now have to be reversed. With the Fed stress tests in Feb. 2015 the focus is on banks with large trading desks. Goldman unlike other banks has counted on a strategy of preserving a large trading operation in the hope that this will earn the bank larger profits when the market recovers. This does not sit well with the Fed in the 2015 stress tests- showing a $23.8 billion loss if the stock market fell by 60% in a crisis, leaving Goldman with a bare minimum in reserves. Goldman will now have to reduce the buybacks to add to reserves after the current stress tests, and pare down its trading desk operation.

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Leakage of state funds is serious. Just think how many hospitals and schools, how many solar panel farms or wind farms can be built with $4.5 billion that is reported as the money laundered in the 1MDB leakage of state infrastructure funds? Here it is reported that Goldman Sachs settles for its involvement in the 1MDB with $2.5 billion in cash and guarantee recovery of $1.4 billion in proceeds from assets lost by the Malaysia state infrastructure fund. This is what the WSJ says on July 24, 2020, Ben Otto and Chester Tay- "Goldman Sachs was the main banker for the Malaysian fund 1 Malaysia Development Bhd. or 1MDB. The bank raised billions of dolars for the fund which was allegedly stolen by people working for the fund, government officials and two senior Goldman bankers." It also says Goldman raised $6.5 billion for the 1MDB through bond sales in 2012 and 2013, much of which was stolen by a Malaysian government advisor. And that Goldman received $600 million in fees which would be about 10%. Many of the countries in Asia and Africa have a colonial past in which little or no investment was made for centuries in heath, education and infrastructure. This makes it all the more appalling and heartbreaking. Goldman bankers were also involved in advising China during the hyper growth years which are leading today to little or no growth and concentration in property sector, with appalling devastation of the climate in China over a compressed period of 10-15 years 1995-2010,  leading to fires, floods, drought in China and worldwide, including in Africa and Asia. Was this good advice or self-serving for investment banks as this was accompanied by shift of manufacturing to China leading to decay of communities throughout America and and now a reversal after the pandemic all compressed so as to wreak havoc first one way and then the other way leading to a world more prone to conflict and war. Was this good advice or a cautionary tale for both America, for African and Asian countries and for China most of all a country that has a colonial past and treated with respect by Americans. Two Americans come to mind  Theodore Roosevelt who helped establish the now famous Tsinghua University in Beijing in 1911, and Joe Stilwell who led the Allied operations in China against the Japanese. Were Roosevelt, Stilwell sincere friends of China and Asian countries or the Goldman bankers is a question that just comes up. ...

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Greg Smith, a midlevel executive at its London office, writes an op-ed article in the New York Times on March 15, 2012, describing the culture at Goldman Sachs as toxic. Smith is from S. Africa, of Lithuanian Jewish origin, and studied on a scholarship at Stanford before joining Goldman.

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Roben Farzad of Bloomberg BW meets with Goldman Sach's Harvey M. Schwartz, co-head of the global securities division, to get Goldman's account of the global financial crisis of 2008-2009, the AIG rescue, and John Paulson.

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According to this report in The Times money taken from a sovereign investment fund was used for the film "Wolf on Wall Street," starring Leonard Di Caprio. Details of the 1MDB story first investigated by the Wall Street Journal read like a detective novel. Malaysia's former prime minister in his 90's returned this year to defeat his former protege Najib in an election that revolved around the 1MDB story and how the state investment fund had funds diverted away from development goals by Najib. Malaysia's Attorney General files criminal charges against Goldman Sachs bank for collusion in the loss of billions of dollars from the 1MDB Malaysia fund intended for development goals, according to this report in The Times. Two former employees are accused of misappropriating $2.7 billion. The statement by the Attorney General, Tommy Thomas about Goldman Sachs bank said: "They have fallen short of any standard... they have to be held accountable." ...

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SEC files civil lawsuit for securities fraud against Goldman Sachs for the Abacus deal.

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Kathryn Ruemmler and connection to Epstein in Epstein files- her resignation as legal counsel to Goldman Sachs in Feb 2026.

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Under the Volcker Rule setup during the global financial crisis of 2008-2009, banks total investments in private equity, hedge funds and similar higher risk funds cannot exceed 3% of high quality capital. During the financial crisis investment banks were highly leveraged leading to the collapse of Bear Stearns and Lehman Brothers, and the precarious financial condition of other banks. Goldman has pared down about 60% of such investments. Remaining are $4.8 billion in private equity investments, $1.2 billion in real estate, and about $1.1 billion in both credit and hedge funds. Regulators have given the bank till July 2017 to comply. As banks recovered from the impact of the crisis, the tearing of the social fabric that happened with high unemployment in some groups especially older white men, has remained six years after the crisis- as evident in the U.S. election campaigns this year. As a result the mood has shifted for tighter regulation and both party platforms, Republican and Democratic, now call for reinstatement of the Glass Steagall Act, which separated commercial banking from investment banking as part of the lessons learned from the Great Depression. Volcker, was chairman of the U.S. Federal Reserve during the Carter administration, known for taking a tough line against inflation. He was the principal driver of the move to restrict banks from risky activity, and faced considerable opposition from banks during the 2009-2013 period when the rule was being formulated.  ...

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Greg Smith resigns as executive director of Goldman Sachs on March 14, 2012. In an op-ed in the New York Times, Smith calls the culture at Goldman "toxic."

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Goldman Sachs Group is in negotiations with the U.S. government to admit responsibility for its role in the 1MDB corruption scandal in Malaysia and pay a $2 billion fine. The WSJ reports that Goldman raised $6.5 billion for 1MDB, or 1Malaysia Development BhD. Money raised was intended to be used for development and infrastructure in Malaysia. WSJ points out that it was misused by Malaysian government advisors under the government of Mr. Najib Razak, and 2 Goldman bankers. Goldman pursued $600 million in fees and ignored red flags that this misuse of funds was happening. Malaysia's newly elected government of Mr. Mahathir Mohammed is trying to clear up the mess of the previous government of Mr. Najib Razak, and has charged Goldman in a separate criminal investigation including 17 former and current employees of Goldman offices in Asia. Mr. Mahathir Mohammed came to power on an anti-corruption platform. The WSJ was the first to look into problems at the development fund, which it has continued to do for many years, helping Malaysia redirect development finances for growth. ...

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Jesse Eisinger compares the public criticism and the response of two executives of major American banks- Dimon of JP Morgan Chase and Blankfein of Goldman Sachs. He says Dimon may come out looking better with his reputation in much better shape because of the changes he made at JP Morgan Chase after realizing that he had made faulty judgements. Dimon has now set the goal of putting JP Morgan ahead of the other banks in its risk management and working with regulators. Blankfein is seen as making only minor changes in the culture at Goldman and having overcome a wave of public criticism without significant change in the way the company does business. In the process Dimon will have learned more from the financial crisis and make improvements that will be good for JP Morgan in the future, an opportunity that Blankfein is seen as missing.