The Goldman Sachs Group, Inc.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Companys business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Goldman Sachs participated in a fraud and money-laundering scheme in collusion with 1MDB; (ii) the foregoing conduct, when revealed, would foreseeably subject Goldman Sachs to heightened regulatory investigation and enforcement; and (iii) as a result, Goldman Sachss public statements were materially false and misleading at all relevant times. On March 7, 2016, Bloomberg News published an article entitled Ex-Goldman Banker to Malaysia Fund Said Subpoenaed in U.S. Probe, reporting that the U.S. Justice Department had subpoenaed Leissner in late February in connection with a probe linked to 1MDB. Goldman Sachs has since been the subject of investigations by the U.S. Justice Department regarding the multibillion-dollar fraud and money-laundering scheme involving 1MDB, for which Goldman Sachs was the primary bond underwriter. Following this news, Goldman Sachss stock price fell $3.75 per share, or 2.41%, to close at $151.60 on March 8, 2016. On November 1, 2018, U.S. federal prosecutors in the Eastern District of New York (E.D.N.Y.) unsealed indictments against Leissner and Ng related to the 1MDB probe, explicitly describing them as agents acting within the scope of their employment on behalf of the Company with the intent, at least in part, to benefit Goldman Sachs. That same day, the United States Attorneys Office for the E.D.N.Y. announced that Leissners guilty plea was unsealed for a two-count criminal information charging Leissner with conspiring to launder money and conspiring to violate the FCPA [Foreign Corrupt Practices Act] by both paying bribes to various Malaysian and Abu Dhabi officials and circumventing the internal accounting controls of the Financial Institution while he was employed by it. The U.S. Attorneys Office also stated that, [a]ccording to court filings, Leissner has been ordered to forfeit $43,700,000 as a result of his crimes. On November 8, 2018, a report by Bloomberg News detailed the personal involvement of Goldman Sachss then-Chief Executive Officer (CEO), Lloyd Blankfein, in a meeting to establish ties with Malaysia and its new sovereign wealth fund that was referenced in the court documents unsealed the prior week. In a November 8, 2018 article entitled Goldmans Blankfein Said to Have Attended 2009 1MDB Meeting, Bloomberg News noted that Blankfein was the unidentified high-ranking Goldman Sachs executive referenced in U.S. court documents who attended a 2009 meeting with the former Malaysian prime minister, and that [t]he meeting was arranged with the help of men who are now tied to the subsequent plundering of the 1MDB fund[.] On this news, Goldman Sachss stock price fell by $9.00, or nearly 4%, closing at $222.65 on November 9, 2018. On November 12, 2018, Malaysian government officials denounced Goldman Sachss role in the 1MDB scandal. Malaysian Prime Minister Mahathir Mohamad stated that [t]here is evidence that Goldman Sachs has done things that are wrong and [o]bviously we have been cheated through the compliance by Goldman Sachs people. Meanwhile, the countrys Finance Minister Lim Guan Eng said that Malaysia would seek a full refund of the approximately $600 million in fees that the Company earned in connection with 1MDBs $6.5 billion bond deal. Following this news, Goldman Sachss stock price fell $16.60 per share, or nearly 7.5%, to close at $206.05 on November 12, 2018.