US Fed bars ex-Goldman Sachs executive for role in 1MDB scandal, Latest Business News - The New Paper

US Fed bars ex-Goldman Sachs executive for role in 1MDB scandal

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WASHINGTON The US Federal Reserve said yesterday it permanently barred a former Goldman Sachs executive from the banking industry over his role in the 1Malaysia Development Berhad (1MDB) corruption scandal.

Mr Andrea Vella, who was formerly co-head of Goldman's Asia investment banking division ex-Japan, failed to escalate information he had about Malaysian financier Low Taek Jho's involvement in three bond offerings that Goldman underwrote for Malaysia's sovereign wealth fund, the regulator said.

Malaysian and US authorities have charged Low in connection with the theft of billions of dollars from 1MDB, which was originally set up by former Malaysian prime minister Najib Razak to fund infrastructure projects.

The Fed said Mr Vella "engaged in unsafe and unsound practices by failing to ensure" that Low's involvement was "fully escalated within the firm".

Mr Vella consented to the bar without admitting or denying any of the allegations made by the regulator, according to the statement from the Fed.

Mr Andrew Levander, a lawyer representing Mr Vella, said the fact that his client was not fined shows that Mr Vella did not know about wrongdoing, such as others discussing or accepting bribes or kickbacks.

"Mr Vella agreed to this limited settlement in order to move on to the next stage of his career and to avoid putting himself and his family through years of litigation," Mr Levander said in a statement.

A spokesman for Goldman Sachs confirmed that Mr Vella had left the company in recent days after being on leave since October 2018.

The US Justice Department says that US$4.5 billion(S$6.2 billion) was misappropriated by high-level 1MDB fund officials and their associates between 2009 and 2014.