Dividends and Goldman Sachs, Malaysia agree to $3.9 billion settlement in 1MDB scandal

In late July, Goldman Sachs and the government of Malaysia announced an agreement to end a criminal probe over the role of Goldman in the 1MBD multibillion scandal.

In an article by Rozanna Latiff, Joseph Sipalan and Elizabeth Dilts Marshall of Reuters, the 1MDB principles who included former Malaysian PM Najib Razak stole at least $4.5 billion from the government.

Steven Chubak, an analyst at Wolfe Research wrote. We view this as positive as Goldman Sachs is closer to removing a key overhang for investors, and this provides added comfort that the total settlement amount should be manageable.

Goldman is paying a fine of $2.5 billion and returning at least $1.4 billion in proceeds from assets linked to the sovereign wealth fund 1MBD. Fortunately, Goldman had put away at least $3 billion for legal maters. No one goes to jail, but a number of senior people have left the firm.

Linking to dividend paying stocks, we have seen many times when errors are made at large companies, eventually a cash settlement is made and life continues, albeit governance issues are examined. Till the next time, the company can reap billions on the shady side. Just because a company is large and profitable does not make it ethical, however if it is large and profitable it can pay its dividends.

There are more questions than answers, till the next time – to raising questions.

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