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Ng Files Motion To Dismiss

RogerNg

As highlighted in this prior post, in November 2018 the DOJ criminally charged former Goldman Sachs executives Tim Leissner and Ng Chong Hwa (Roger Ng) (along with Low Taek Jho – Jho Low) with Foreign Corrupt Practices Act offenses for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

Leissner pleaded guilty and in October Goldman Sachs resolved a net $1.66 billion FCPA enforcement action based on the same conduct. (See additional posts here and here).

Ng is mounting a defense and recently filed this motion to dismiss (an entire section of which is redacted). As highlighted below, Ng argues that the DOJ’s case against him suffers from several factual errors and legal deficiencies. Ng also suggests that the DOJ scripted Leissner’s guilty plea and that Goldman’s DPA was entered into for reasons of risk aversion and otherwise compromises his ability to defend himself.

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Additional Issues To Consider From The Goldman Enforcement Action

Issues

This prior post highlighted the net $1.66 billion Foreign Corrupt Practices Act enforcement action against Goldman Sachs and a related entity.

This prior post posed the question, based on the government’s allegations, what should happen when compliance is decent (and often good), but not great? The prior post also highlighted how the Goldman enforcement action was much different than certain other top ten FCPA enforcement actions.

This prior post discussed various developments related to the Goldman FCPA enforcement action.

This post continues the analysis by highlighting additional issues to consider from the enforcement action.

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Goldman – What Should Happen When Compliance Is Decent (And Often Good), But Not Great?

question marks2

The recent Foreign Corrupt Practices Act enforcement action against Goldman Sachs was the largest in FCPA history in terms of actual settlement amount ($1.66 billion).

Yes, the conduct at issue involved large bribe payments (according to the DOJ approximately $1.6 billion). Yes, the conduct at issue resulted in (according to the DOJ) Goldman obtaining “in excess of $600 million in fees and revenue across its divisions, and increased Goldman’s stature in SE Asia.” Yes, the conduct of the culpable Goldman employees criminally charged (Tim Leissner and Roger Ng) was egregious.

Viewed through the strict lens of respondeant superior, perhaps the record-setting FCPA enforcement action was justified. In this regard, the Goldman press release nicely stated in plain English: “We all share in the benefits when our colleagues perform well for our clients. The opposite must be true as well.  When a colleague knowingly violates a firm policy, or much worse, the law, we – as a firm – have to accept responsibility and recognize the broader failure that individual behavior represents for our firm.”

However, based on the DOJ’s (and SEC’s) allegations, the Goldman enforcement action was much different than certain other top ten FCPA enforcement actions.

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Goldman – Related Developments

Goldman

As highlighted in this prior post, last week the DOJ and SEC announced a net $1.66 billion Foreign Corrupt Practices Act enforcement action (the largest ever) against Goldman Sachs in connection with the IMDB fund.

As highlighted below, in connection with the same core conduct, the Federal Reserve Board also announced that it had fined Goldman $154 million for engaging in “unsafe and unsound practices.”

In addition, as highlighted below, the SEC issued a temporary order granting Goldman affiliated entities an exemption from the Investment Company Act’s prohibition on serving or acting an investment advisor or depositor upon the conviction of a felony.

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DOJ / SEC Announce Net $1.66 Billion (The Largest Of All-Time) FCPA Enforcement Action Against Goldman Sachs In Connection With 1MDB Fund

Goldman

As highlighted in this prior post, in November 2018 the DOJ announced criminal charges against former Goldman Sachs employees Roger Ng and Tim Leissner, and Low Taek Jho (Jho Low – an individual “known to be close to various high-ranking officials in Malaysia and Abu Dhabi” who “worked as an intermediary in related to 1MDB and other foreign government officials on numerous financial transactions and projects involving Goldman and others) for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

This prior post asked: what does this mean for Goldman Sachs?

We now know the answer as the DOJ and SEC announced (here and here) a net $1.66 billion FCPA enforcement action against Goldman Sachs and a related entity. This represents the largest FCPA enforcement action of all-time (see here for the prior top ten list).

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