Goldman Sachs Settles 1MDB Shareholder Fraud Case

Goldman Sachs has agreed to settle a class-action lawsuit accusing the Wall Street giant of defrauding shareholders over its involvement with 1MDB, Malaysia's sovereign wealth fund entangled in corruption scandals. The settlement, filed in Manhattan federal court, awaits preliminary approval by May 20, according to a joint statement from Goldman and shareholders.

The financial terms of the settlement have not been disclosed, and both Goldman and the lead shareholder lawyers, Sweden's Sjunde AP-Fonden, have refrained from commenting further. The lawsuit claims Goldman misrepresented its role in fraudulently profiting from 1MDB's $6.5 billion bond sales, through which it earned $600 million in fees.

Between 2009 and 2014, approximately $4.5 billion was allegedly misappropriated from the fund, some of which ended up in offshore accounts linked to financier Jho Low. Goldman had previously settled related U.S. and Malaysian probes for $2.9 billion. Despite this, investor sentiment led to a tumble in the bank's share price, accusing it of deceptive practices.