Downfall of ex-Goldman banker linked to Malaysian financier
6 April 2016
http://nypost.com/2016/04/06/downfall-of-ex-goldman-banker-married-linked-to-malaysian-financier/
Former Goldman Sachs highflier Tim Leissner was brought down by his ties to a murky Malaysian financier at the center of a massive money-laundering scandal, a new report reveals. Goldman said last month it suspended Leissner, the bank’s Singapore-based chairman for Southeast Asia, after it discovered he wrote an “inaccurate and unauthorized” reference letter. The firm didn’t say who was the beneficiary of Leissner’s letter.
Now, it turns out, the banker wrote the letter on behalf of Low Taek Jho — known as Jho Low — who is being probed for his role in setting up Malaysia’s embattled state development fund, 1MDB, Bloomberg News reported on Wednesday, citing people familiar with the matter. The global investigation is looking into allegations that 1MDB funds were embezzled by the Malaysian prime minister and other politically connected people.
Before the scandal surfaced, Low made waves in the US for splashing around cash on art, real estate and posh night clubs. He also helped Malaysian Prime Minister Najib Razak’s stepson launch the Hollywood production company that financed “The Wolf of Wall Street.
US authorities have subpoenaed Leissner after he engineered a series of Goldman-led bond deals for 1MDB, which is now struggling with debt. He is expected to appear before a grand jury this month to discuss Goldman’s role in funding 1MDB, Bloomberg reported. Leissner, who is married to businesswoman and former model Kimora Lee Simmons, resigned from Goldman at the end of February following his suspension.
Goldman Sachs probed in alleged Treasury rigging
20 March 2016
http://nypost.com/2016/03/20/goldman-sachs-allegedly-rigged-prices-of-treasury-bonds/
Washington’s probe into the alleged rigging of the $13 trillion US Treasurys market by Wall Street banks has narrowed its focus to a handful of firms — including Goldman Sachs, The Post has learned. In addition, European authorities have opened their own investigation into possible Treasurys bid-rigging, sources said.
Investigators in the fraud division of the Justice Department have obtained chats and emails from Goldman that appear to implicate the company in manipulating the price of Treasury bonds, according to two sources familiar with the investigation. Those chats and emails are being analyzed to determine if traders at other banks could be involved with any possible bid-rigging of US government debt, those two people said. The identities of any traders in investigators’ cross hairs couldn’t be learned.
Goldman is said to be cooperating with the probe, one person said. In June, The Post reported exclusively that Justice was in the early stages of investigating banks for rigging the price of Treasurys, the largest and most easily tradeable asset in the world. Goldman is one of about 22 financial institutions that have been probed for any evidence that they may have manipulated Treasury auctions — a secretive process where banks and other financial services companies bid on the price of government debt, sources said.
Justice is also looking into whether there was price-rigging in the secondary market for Treasurys, where debt is sold at a premium, sources added. It’s unclear if investigators have yet found any improprieties or criminality. Goldman, run by Chief Executive Lloyd Blankfein, is a major player in US government bond trading, and regularly submits bids for auctions. In November, Goldman disclosed in a regulatory document that it was being probed for possible manipulation of government bond prices. Michael DuVally, a Goldman spokesman, declined to comment further.
Meanwhile, the European Commission, the law enforcement arm of the European Union, has opened its own investigation, joining Justice, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the New York Department of Financial Services, according to two sources. The rigging investigation is the biggest scandal to hit the quiet but crucial Treasurys market since 1990 when Paul Mozer, a former Salomon Brothers partner, illegally cornered the government debt market. Mozer’s actions are known to readers of Michael Lewis’ “Liar’s Poker.”
Traders are thought to have rigged the market in two possible ways: by agreeing beforehand to keep bond prices higher than normal in order to boost profits in other positions that depend on higher rates, similar to how banks rigged the London-based Libor rate. Banks also could have colluded to keep prices lower than normal to sell them at a higher price — and score a bigger spread — to their clients, who agreed to pay a fixed amount beforehand. A Justice Department spokesman didn’t return an email seeking comment, while EC spokesman Ricardo Cardoso declined to comment.
Goldman parts ways with banker ensnared in Malaysia scandal
24 February 2016
http://nypost.com/2016/02/24/goldman-parts-ways-with-banker-ensnared-in-malaysia-scandal/
Goldman Sachs has parted ways with a top banker who is embroiled along with the firm in a growing scandal over Malaysia’s troubled state investment fund. Tim Leissner, Goldman’s Singapore-based chairman for Southeast Asia, left the Wall Street firm earlier this month, a bank spokesman said on Wednesday. Leissner, who is married to glamorous businesswoman and former model Kimora Lee Simmons, relocated to Los Angeles and took personal leave in January amid multiple graft and corruption probes into state-owned 1Malaysia Development Bhd.
Leissner is under scrutiny for his cozy relationships with top Malaysia officials, including the country’s prime minister, Najib Razak, who set up 1MDB to foster growth. But billions have been diverted from the fund, including nearly $700 million that showed up in Razak’s personal accounts, according to a Swiss audit. Razak has denied wrongdoing.
Leissner was instrumental in helping Goldman land a series of controversial bond deals for 1MDB, which is now struggling with debt. The bank is taking heat for the lucrative — some say “exorbitant” — investment banking fees it charged the fund. Goldman worked on nearly $19 billion in Malaysian mergers and acquisitions over the past five years, making it the top foreign adviser to that country, according to Bloomberg News.