Malaysia Files Criminal Fraud Charges Against Goldman Sachs

by Tyler Durden

Mon, 12/17/2018 - 06:24

 https://www.zerohedge.com/news/2018-12-17/malaysia-files-criminal-fraud-charges-against-goldman-sachs

 

In an unprecedented move that possibly foreshadows similar charges from the US DOJ - and lots of headaches for the "recently retired" Lloyd Blankfein - the Malaysian attorney general has filed criminal charges against Goldman Sachs - targeting two of the investment bank's Asian subsidiaries and two former Goldman bankers who have already been charged by the US (former Southeast Asia head Tim Leissner and banker Roger Ng), accusing the investment bank of violating the country's securities laws by lying in bond agreements for three deals that raised $6.5 billion for 1MDB, a Malaysian sovereign wealth fund formed under former Prime Minister Najib Razak that US authorities believe was looted for upwards of $4 billion by corrupt bankers and officials.
While authorities in Singapore, Switzerland and elsewhere had already filed criminal charges against various banks involved with the scandal last year, the first charges against Goldman and its employees over their involvement in the scandal materialized two months ago when the DOJ indicted Leissner and Ng.
Shortly after the indictments, media reports revealed that senior Goldman executives - most notably, former CEO Lloyd Blankfein - were involved with the transactions. Blankfein attended at least three meetings with either Razak or disgraced Malaysian financier Jho Low, the allegedly corrupt financier who was also indicted by Malaysian authorities on Monday, even inviting Low to a private sit down at Goldman's 200 West Street headquarters. While pursuing the deal, Goldman employees - including Blankfein - brushed aside concerns raised by the bank's compliance department, and allowed Low to function as an unofficial intermediary between the bank and the Malaysian government, despite the bank's compliance department warning that Low was not to be trusted. The DOJ is also reportedly looking into the role of other senior Goldman bankers.

The charges followed reports over the weekend claiming that former senior Goldman employees believe 1MDB could tarnish Blankfein's legacy for reviving the bank's reputation following a massive 2010 settlement for abuses related to its sales of mortgage bonds before the financial crisis. Commenting on the 1MDB deals, one executive said "something doesn't smell right" and questioned how they managed to get past compliance.

"We believe these charges are misdirected, will vigorously defend them and look forward to the opportunity to present our case. The firm continues to cooperate with all authorities investigating these matters," Goldman said in a statement to the Wall Street Journal.

In a statement to the Financial Times, Tommy Thomas, Malaysia’s attorney-general, alleged in a statement that Goldman received $600 million in fees for its role, a total that was "several times higher than the prevailing market rates and industry norms." Malaysia is demanding that Goldman forfeit all of the fees it was paid by the Malaysian government (which were paid at a higher-than-market rate to reflect certain "risks" related to the deal), as well as additional punitive money. While the DOJ has alleged that some $4.5 billion was stolen from 1MDB, Malaysian authorities are targeting $2.7 billion.

"Malaysia considers the allegations in the charges against the accused to be grave violations of our securities laws, and to reflect their severity, prosecutors will seek criminal fines against the accused well in excess of the $2.7 billion misappropriated from the bonds proceeds and $600 million in fees received by Goldman Sachs, and custodial sentences against each of the individual accused: the maximum term of imprisonment being 10 years," the attorney general’s statement said.

Malaysia's indictment alleged that statements in Goldman's bond-sale documents were "false and misleading," and that the Goldman employees who were involved personally profited and benefited from the deals.

Malaysia said the offering circulars and private placement memorandum issued by Goldman for the three bonds contained statements which were "false, misleading, or from which there were material omissions" because they said proceeds of the bonds would be used for legitimate purposes.
"Offering circulars and private placement memorandum are serious documents, intended to be relied on, and, in fact, were relied on, by purchasers of the bonds," it said..
Malaysia said the accused structured the bond issues for “ostensibly legitimate purposes when they knew that the proceeds thereof would be misappropriated and fraudulently diverted”.
"In addition to personally receiving part of the misappropriated bond funds, those employees and directors of Goldman Sachs received large bonuses and enhanced career prospects at Goldman Sachs and in the investment banking industry generally," the attorney-general’s office alleged.

Already the 1MDB controversy has inspired some Goldman clients to cut ties with the bank, particularly among the sovereign wealth fund set, which the bank had targeted as a "key growth area." One Abu Dhabi fund has sued Goldman over unspecified damages related to 1MDB.
Goldman executives who have so far evaded prosecution now have another reason to be anxious, because even if they avoid scrutiny by the DOJ, the US does have an extradition treaty with Malaysia.
This holiday season, 1MDB has truly become the gift that keeps on giving for Blankfein.

Danish banker turned whistleblower exposes the banking cartel

Bush Sr. Made a Killing – 50 Miners Buried Alive

December 10, 2018

Greg Palast

https://www.gregpalast.com/poppy-strikes-gold-bush-sr-made-a-killing-50-miners-buried-alive/

 

While pundits are falling all over themselves spewing about the “civility” of the patrician George H. W. Bush, l must honor the memory of those 50 men who were buried alive in a gold field in Africa so Bush Sr. could cash in.
To me, this is the most important story of my career — and almost ended it when Bush’s gold mining company (I bet you didn’t know he had one) sued my paper, The Guardian, threatening it with bankruptcy for telling the truth.
But ultimately, the truth was also buried alive, as US papers refused to cover the story, fearing the gold company’s wrath. (Salon.com was the exception.)
I dedicate this story to those miners, buried without pomp, buried by bulldozers while still alive. And to Tundu Lissu the Tanzanian lawyer, father of twins, who risked his life to provide me the corroborating evidence.
Tundu has taken twelve bullets, but survives.

I apologize if this photo of a burial is not as pretty as the one afforded 

George H. W. Bush. The corpse was pulled from the Bulyanhulu gold mine 

in Tanzania where 50 “jewelry” miners were buried alive to clear the gold 

field for sale to Barrick Gold. Barrick had hired Bush Sr. to help seal this 

deal and others. This photo and video was provided by Tanzanian lawyer 

Tundu Lissu who risked his life to get it to me and The Guardian.

Here is the story as originally published in the first U.S. edition of The Best Democracy Money Can Buy.

Poppy Strikes Gold

In the final days of the Bush (Senior) administration, the Interior Department made an extraordinary but little noticed change in procedures under the 1872 Mining Law, the gold rush–era act that permitted those whiskered small-time prospectors with their tin pans and mules to stake claims on their tiny plots. The department initiated an expedited procedure for mining companies that allowed Barrick to swiftly lay claim to the largest gold find in America. In the terminology of the law, Barrick could “perfect its patent” on the estimated $10 billion in ore — for which Barrick paid the U.S. Treasury a little under $10,000. Eureka!

Barrick, of course, had to put up cash for the initial property rights and the cost of digging out the booty (and the cost of donations, in smaller amounts, to support Nevada’s Democratic senator, Harry Reid). Still, the shift in rules paid off big time: According to experts at the Mineral Policy Center of Washington, DC, Barrick saved — and the U.S. taxpayer lost — a cool billion or so. Upon taking office, Bill Clinton’s new interior secretary, Bruce Babbitt, called Barrick’s claim the “biggest gold heist since the days of Butch Cassidy.” Nevertheless, because the company followed the fast-track process laid out for them under Bush, this corporate Goldfinger had Babbitt by the legal nuggets. Clinton had no choice but to give them the gold mine while the public got the shaft.

Barrick says it had no contact whatsoever with the president at the time of the rules change.[1] There was always a place in Barrick’s heart for the older Bush — and a place on its payroll. In 1995, Barrick hired the former president as Honorary Senior Advisor to the Toronto company’s International Advisory Board. Bush joined at the suggestion of former Canadian prime minister Brian Mulroney, who, like Bush, had been ignominiously booted from office. I was a bit surprised that the president had signed on. When Bush was voted out of the White House, he vowed never to lobby or join a corporate board. The chairman of Barrick openly boasts that granting the title “Senior Advisor” was a sly maneuver to help Bush tiptoe around this promise.

I was curious: What does one do with a used president? Barrick vehemently denies that it appointed Bush “in order to procure him to make contact with other world leaders whom he knows, or who could be of considerable assistance” to the company. Yet, in September 1996, Bush wrote a letter to help convince Indonesian dictator Suharto to give Barrick a new, hot gold-mining concession.

Bush’s letter seemed to do the trick. Suharto took away 68 percent of the world’s largest goldfield from the finder of the ore and handed it to Barrick. However, Bush’s lobbying magic isn’t invincible. Jim Bob Moffett, a tough old Louisiana swamp dog who heads Freeport-McMoRan, Barrick’s American rival, met privately with Suharto. When Suharto emerged from their meeting, the kleptocrat announced that Freeport would replace Bush’s Canadians. (Barrick lucked out: The huge ore deposit turned out to be a hoax. When the con was uncovered, Jim Bob’s associates invited geologist Mike de Guzman, who “discovered” the gold, to talk about the error of his ways. Unfortunately, on the way to the meeting, de Guzman fell out of a helicopter.)

Who is this “Barrick” to whom our former president would lease out the reflected prestige of the Oval Office? I could not find a Joe Barrick in the Canadian phone book. Rather, the company as it operates today was founded by one Peter Munk. The entrepreneur first came to public notice in Canada in the 1960s as a central figure in an insider trading scandal. Munk had dumped his stock in a stereo-making factory he controlled just before it went belly up, leaving other investors and government holding the bag. He was never charged, but, notes Canada’s Maclean’s magazine, the venture and stock sale “cost Munk his business and his reputation.” Yet today, Munk’s net worth is estimated at $350 million, including homes on two continents and his own island.

How did he go from busted stereo maker to demi-billionaire goldbug? The answer: Adnan Khashoggi, the Saudi arms dealer, the “bag man” in the Iran-Contra arms-for-hostage scandals. The man who sent guns to the ayatolla teamed up with Munk on hotel ventures and, ultimately, put up the cash to buy Barrick in 1983, then a tiny company with an “unperfected” claim on the Nevada mine. You may recall that Bush pardoned the coconspirators who helped Khashoggi arm the Axis of Evil, making charges against the sheik all but impossible. (Bush pardoned the conspirators not as a favor to Khashoggi, but to himself.)

Khashoggi got out of Barrick just after the Iran-Contra scandal broke, long before 1995, when Bush was invited in. By that time, Munk’s reputation was restored, at least in his own mind, in part by massive donations to the University of Toronto. Following this act of philanthropy, the university awarded Munk–adviser Bush an honorary degree. Several students were arrested protesting what appeared to them as a cash-for-honors deal.

Mr. Munk’s president-for-hire did not pay the cost of his rental in Indonesia. The return on Barrick’s investment in politicians would have to come from Africa.
Mobutu Sese Seko, the late dictator of the Congo (Zaire), was one of the undisputed master criminals of the last century having looted hundreds of millions of dollars from his national treasury — and a golfing buddy of the senior Bush. That old link from the links probably did not hurt Barrick in successfully seeking an eighty-thousand-acre gold-mining concession from the Congolese cutthroat. Bush himself did not lobby the deal for Barrick. It wasn’t that the former president was squeamish about using the authority of his former posts to cut deals with a despot. Rather, at the time Bush was reportedly helping Adolf Lundin, Barrick’s sometime industry rival. Africa specialist Patrick Smith of London disclosed that Bush called Mobutu in 1996 to help cinch a deal for Lundin for a mine distant from Barrick’s.

Rebellion against Mobutu made the mine site unusable, though not for the company’s lack of trying. In testimony in hearings convened by the minority leader of the House Foreign Affairs Subcommittee on Human Rights, expert Wayne Madsen alleged that Barrick, to curry favor with both sides, indirectly funded both and thereby inadvertently helped continue the bloody conflict. The allegation, by respected journalist Wayne Madsen, has not been substantiated: The truth is lost somewhere in the jungle, where congressional investigators will never tread.

Though Barrick struck out in Indonesia and the Congo, the big payoff came from the other side of the continent. The company’s president bragged to shareholders that the prestige of the Mulroney-Bush advisory board was instrumental in obtaining one of the biggest goldfields in East Africa at Bulyanhulu, Tanzania. Barrick, according to its president, had hungered for that concession — holding an estimated $3 billion in bullion—since the mid-1990s, when it first developed its contacts with managers at Sutton Resources, another Canadian company, which held digging rights from the government. [See footnote 1.] Enriched by the Nevada venture, Barrick could, and eventually would, buy up Sutton. But in 1996, there was a problem with any takeover of Sutton: Tens of thousands of small-time prospectors, “jewelry miners,” so called because of their minuscule finds, already lived and worked on the land. These poor African diggers held legal claim stakes to their tiny mine shafts on the property. If they stayed, the concession was worthless.

In August 1996, Sutton’s bulldozers, backed by military police firing weapons, rolled across the goldfield, smashing down worker housing, crushing their mining equipment and filling in their pits. Several thousand miners and their families were chased off the property. But not all of them. About fifty miners were still in their mine shafts, buried alive.

Buried alive. It’s not on Bush’s resume, nor on Barrick’s Web site. You wouldn’t expect it to be. But then, you haven’t found it in America’s newspapers either.
There are two plausible explanations for this silence. First, it never happened; the tale of the live burials is a complete fabrication of a bunch of greedy, lying Black Africans trying to shake down Sutton Resources (since 1999, a Barrick subsidiary). That’s what Barrick says after conducting its own diligence investigation and relying on local and national investigations by the Tanzanian government. And the company’s view is backed by the World Bank. See Chapter 8 of my book The Best Democracy Money Can Buy for more on this.[2]
There’s another explanation: Barrick threatens and sues newspapers and human rights organizations that dare to breathe a word of the allegations — even if Barrick’s denials are expressed. I know: They sued my papers, The Observer and Guardian. Barrick even sent a letter to the internationally respected human rights lawyer Tundu Lissu, a fellow at the World Resources Institute in Washington, DC, outlining its suit against The Observer and warning that it would take “all necessary steps” to protect its reputation should the Institute repeat any of the allegations. Barrick’s threats are the least of Lissu’s problems. For supplying me with evidence — photos of a corpse of a man allegedly killed by police during the clearance of the mine site, notarized witness statements, even a police video of workers seeking bodies from the mine pits — and for Lissu’s demanding investigation of the killings, his law partners in Dar es Salaam have been arrested and Lissu charged by the Tanzanian government with sedition.

In 1997, while Bush was on the board (he quit in 1999), Mother Jones magazine named Barrick’s chairman Munk one of America’s “10 Little Piggies” — quite an honor for a Canadian — for allegedly poisoning the West’s water supply with the tons of cyanide Barrick uses to melt mountains of ore.

Notably, one of the first acts of the junior Bush’s Interior Department in 2001 was to indicate it would reverse Clinton administration rules requiring gold extractors to limit the size of waste dumps and to permit new mines even if they were likely to cause “substantial, irreparable harm.” The New York Times ran a long, front-page story on this rule-relaxing windfall for Nevada goldmining companies, but nowhere did The Times mention the name of the owner of the largest gold mine in Nevada, Barrick, nor its recent payroller, the president’s father.
For those who want to listen to the story, here’s my summary. (From my spoken word CD, Weapon of Mass Instruction, Alternative Tentacles.)
[1] Barrick has responded to every allegation reported in my first report on the company in a manner certain to get my attention: The company and its chairman sued my papers, The Guardian and Observer. While I have a distaste for retort by tort, I have incorporated their legitimate concerns to ensure their views are acknowledged in Chapter 8 of my book, The Best Democracy Money Can Buy.

[2] A bit of confusion here: Barrick swore to my paper that the alleged killings “related to a time years before [Barrick] had any connection whatsoever with the company to which the report referred.” Yet Barrick’s president and CEO, Randall Oliphant, told Barrick’s shareholders that prior to their acquisition of Sutton, “we followed the progress at Bully (i.e., Bulyanhulu) for five years, remaining in close contact with the senior management team.” That would connect them to the mine in 1994. The mining company wants me to report their version of events. Okay, here’s both of them.

BofE: Q&A with Deputy Governor Jon Cunliffe

Extract from BofE: Q&A with Deputy Governor Jon Cunliffe

https://bankofenglandfutureforum.co.uk/post/720090

stevegolf 3 days ago
Will independent currencies be allowed to coexist? For example cryptocurrencies.

Reply 5

Jon Cunliffe 22 hours ago
Over the centuries many things have been used as money in different societies and we have learned that for an economy to prosper it is vital that people have trust in the money they use - that it will be accepted when they us it to buy things, that they can store their wealth in it, and that its value is stable. Ensuring trust in the national currency is the core function of the Bank of England. We do this through monetary policy, which keeps the value of our money stable. We do it through our supervision of the banking and payment systems, which makes sure people's money is safe. And we do it through the cash we issue. Technology has changed the way we use money dramatically over the last 30 years and will continue to do so. We are constantly thinking about how technology has changed and will change the way we use money and how we can maintain trust in money and support innovation.

As I argued in my speech earlier this year that I think it’s unlikely that cryptoassets will become widely used alongside traditional currencies any time soon. Cryptocurrencies don't meet any of the tests above well. Nobody stands behind them. They’re not widely accepted in transactions and their value is very volatile so they are not a good store of value, which means that no-one uses them as a unit of account. There are also significant barriers to them becoming more widely used in the long term – for example, existing cryptoasset platforms have limited capacity and cannot handle more than a fraction of the payment volumes that are handled by traditional payment systems (such as Visa, Bacs or Faster Payments) every day.  

In terms of the regulation of cryptoassets, the Bank of England has been involved in a joint project with the Financial Conduct Authority and HM Treasury. You can see the final report of the Cryptoasset Taskforce at the link below (Chapter 5 covers the actions that the three authorities will be taking). But there are no plans to make cryptoassets illegal.
https://assets.publishing.service.gov.uk/gove...t_final_web.pdf

Users tagged:

rekindled_ai

Reply 1

Marco Saba 16 minutes ago
Translation: with the blockchain technology no bank will be allowed to create any more a deposit out of thin air, and the mismatch in bank accounting for money creation - i.e. the fact that new money is NOT accounted for as an inflow in the cash flow account of the bank BUT it is accounted as an outflow when we credit the customer A/c, thus hiding the profits from capital creation - can no more be hidden from the public. So we choose not to forbid outright the use of cryptocurrency but we do our best to discourage the public by boycotting the exchange between fiat and cryptos. Establishing a monetary cadastre visible to the public is not in our best interest because it will exposes all our shenanigans to transfer wealth from poor subjects to the sovereigns of our choice.

NYSE special side deal with Morgan Stanley

NYSE is ‘freaking out’ looking for leakers after Post exposé

By Kevin Dugan

December 7, 2018 https://nypost.com/2018/12/07/nyse-is-freaking-out-looking-for-leakers-after-post-expose/

The New York Stock Exchange scrambled to contain the fallout from The Post’s exclusive Friday report that revealed a special side deal allowing Morgan Stanley to trade large blocks of stock after the closing bell.
Exchange officials were on a witch hunt for leakers who spilled the beans on how a broker was able to make trades on the Big Board even after the markets were closed, a source told The Post.

see also

NYSE is accused of letting Morgan Stanley make after-hours trade

“NYSE is freaking out,” said one source. “They are going crazy looking for who told.”

The side deal, which prevented Morgan Stanley from either risking a trade in an after-hours auction with less price discovery or waiting until Monday morning facing the uncertainty of holding the trade over the G-20 meeting weekend.
The trades prompted accusations of unfairness from Wall Street insiders, who said smaller brokers wouldn’t have gotten such treatment.
“If this has occurred recurrently, it is a BIG story because it suggests systematic favoritism,” said John C. Coffee Jr., a Columbia law school professor and former member of NYSE’s legal advisory board.

He added that the side deal with Morgan Stanley could be a “misdemeanor level in terms of securities violations” in isolation.
The NYSE’s internal regulators are looking into the incident, according to a source briefed on the investigation.

It’s unclear if federal regulators have started to probe the incident. Kristen Kaus, an NYSE spokeswoman, didn’t return a call seeking comment.
The incident, which occurred on Nov. 30, has brought up bad memories for Wall Street over recent allegedly unfair treatment by exchanges.
Earlier this year, the Securities and Exchange Commission fined NYSE $14 million for five separate investigations — including one around a secret electronic order that gave some investors data about what other traders were doing.

Investors said that exchanges bend or break rules to keep their largest clients happy — because they know that competition is fierce.
“If this exchange doesn’t do it, the exchange down the block will do it,” said Joe Saluzzi, co-founder and co-head of equity trading at Themis Trading.
“Are there other special deals? Based on history, I’d say so,” he added.