By CultureBanx Team
Morgan Stanley & Bank of America downgrade Goldman Sachs on 1MDB Scandal
Tim Leissner plead guilty and agreed to forfeit $43.7M
Kimora Lee’s Simmons husband Tim Leissner, a former Goldman Sachs (GS -2.13%) partner in Asia who has plead guilty and agreed to forfeit $43.7 million, is still weighing on the bank as more firms downgrade its stock. Other Wall Street banks are worried about the lingering fallout from Leissner’s 1MDB scandal on Goldman’s bottom line.
Why This Matters: The come down is going to be very real for Goldman as the 1MDB issue is likely to play out for years to come. After three years of having an overweight/outperform rating, Morgan Stanley (MS -0.27%) downgraded the company to equal/neutral and slashed its stock price target by 22%. This is now the second lowest of the 29 analysts surveyed by FactSet. Additionally Bank of America Merrill Lynch (BAC +1.28%) downgraded Goldman to neutral from buy and slashed the price target to $225 a share from $280.
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, the DOJ has alleged. Court documents highlight more than $200 million alone went to Leissner and another alleged co-conspirator.
Leissner and his other defendants spent the money like they were living in a real life 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. Shares of Goldman are hovering around two year lows and down more than 40% since its record close in March.
Situational Awareness: Once the charges were initially filed in 2017, Kimora spoke out and said she and her husband’s finances aren’t connected when it comes to her business endeavors. “I fund my own business. So all my money, not that I want to say it that way, this is my third marriage that I’m on so, no, my husband has nothing to do with my professional life,” Simmons told WWD.
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