Goldman Sachs Takes A $1 Billion Hit Due To Ex-Hip Hop Banker

CBx Vibe:Come Down Is Real” Belly

By CultureBanx Team

  • Goldman Sachs set aside $1.09B in Q4 2019 to settle 1MDB allegations
  • Kimora Lee’s Simmons husband Tim Leissner has plead guilty and agreed to forfeit $43.7M

Kimora Lee’s Simmons husband Tim Leissner, a former Goldman Sachs (GS +1.84%) partner in Asia who pleaded guilty and agreed to forfeit $43.7 million in 2018, is still weighing on the banks earnings. Last week the Wall Street giant set aside $1.09 billion during the final quarter of the year to settle allegations with the Department of Justice (DOJ) for arranging $6.5 billion in loans for Malaysian development fund 1MDB, that was later ransacked by Leissner and others.

Why This Matters: Goldman is reportedly in talks with the DOJ regarding U.S. bribery laws and may plead guilty, while having to cough up $2 billion. This is all because at least one of its bankers was aware that Malaysian financier Jho Low was involved in the 1MDB bond deals. The banker in the “know” who the DOJ is referring to is Leissner, who married hip hop’s original first lady in December 2013. Since he has pleaded guilty in the case, Leissner is also barred by the Securities and Exchange Commission from working in the industry. Previously, Goldman had declined Low as a client multiple times.

Goldman is reportedly in talks with the DOJ regarding U.S. bribery laws and may plead guilty, while having to cough up $2 billion

When the charges were initially filed in 2017, Kimora spoke out to WWD and said she and her husband’s finances aren’t connected when it comes to her business endeavors. This is definitely a good thing considering around $4.5 billion was incorrectly managed from 1MDB fund officials and their associates, which include Leissner along with his accomplices between 2009 and 2014. Court documents highlight more than $200 million alone went to Leissner and another alleged co-conspirator.

Leisner and his other defendants spent the money like they were living in a real life hip hop music video. The men used the funds to buy luxury U.S. properties and yachts, along with art, as well as paying bribes. Allegedly, they laundered the fraudulent proceeds through U.S. banks. Goldman continues to deny any wrongdoing, though investigators claim the bank made around $600 million in fees for its work with 1MDB.

What’s Next: As this never ending scandal continues to unfold and is likely to play out for years, the firm’s most recent reserve in Q4 2019 cut into its overall profits for the quarter, leading the bank to post earnings per share down 22% from the previous year. Goldman should perhaps turn its attention towards their consumer business, including online retail bank Marcus and its credit card business. Both shot up 23% in revenue, to $228 million during the fourth quarter.  Especially since the Malaysian government still wants their piece of the pie, by fining Goldman $7.5 billion.

CBx Vibe:Come Down Is Real” Belly


CultureBanx Team

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