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The $2.9bn fine handed down to Goldman Sachs over their role in #1MDb scandal is hugely welcome, so too is news of individual protection.
However - serious questions remain to be asked about UK enforcement and regulators
Here's why
(THREAD)
However - serious questions remain to be asked about UK enforcement and regulators
Here's why
(THREAD)
FCA & PRA both handed $63m fines to Goldman Sachs' London subsidery GSI . Final notices reveal:
- GSI was "arranger, initial purchaser and underwriter" of #1MDb transactions
- The bank's $547 million profit from #1MDb was booked to GSI (with all but $91m transfer priced out)
- GSI was "arranger, initial purchaser and underwriter" of #1MDb transactions
- The bank's $547 million profit from #1MDb was booked to GSI (with all but $91m transfer priced out)
In 2013, GSI senior personnel in London were told about possible bribery in the #1MDb deal. The FCA notice lays out a series of serious failings at GSI in relation to this alleged bribery - failing to deal with the allegations adequately or escalate them to 'control functions'.
Not the only London connection - a crucial meeting between key intermediary Jho Low (currently being sought by US prosecutors) and the Goldman employees facing prosecution in the US took place here in 2012.
Did regulators and enforcement properly consider investigating and prosecuting GSI for failure to prevent bribery?Why haven't they announced any action against these 'senior personnel' based in GSI in London for serious failings such as reviewing 'approved person' status?
Regulatory fines are not enough to deter corrupt activity where criminal fines can be imposed. @freehills
event survey of lawyers working on corporate crime this week showed close to 70% agree that companies and banks need to be held criminally liable.
event survey of lawyers working on corporate crime this week showed close to 70% agree that companies and banks need to be held criminally liable.
Regulatory action is particularly inappropriate where there are widespread failings across a firm. @goldmansachs
is already under investigation through a review ordered by the @pra into whether its regulatory reporting is adequate https://www.ft.com/content/2b04f78e-2fcf-11ea-a329-0bcf87a328f2
is already under investigation through a review ordered by the @pra into whether its regulatory reporting is adequate https://www.ft.com/content/2b04f78e-2fcf-11ea-a329-0bcf87a328f2
Individuals in positions of responsibility also need to face consequences for the kind of serious failings @fca
and @pra uncovered at GSI in the #1MDb case.
and @pra uncovered at GSI in the #1MDb case.
This isn't only UK based unit of a bank involved in bribery allegations where little apparent criminal enforcement action is going on in the UK - bribes paid by @creditsuisse
employees out of London in relation to Mozambican government bond have not triggered no UK investigation
employees out of London in relation to Mozambican government bond have not triggered no UK investigation
Once again, the UK is looking like a pale shadow of its US regulatory and enforcement counterparts - this is not a good look for a financial centre that needs to protect its integrity by getting serious about financial crime by banks chosing to work out of London.
