As 2019 gets under way, some officials at Goldman Sachs won’t be relishing what the new year might bring. The Malaysian government has claimed that billions of dollars vanished from its 1Malaysia Development Berhad (1MDB) sovereign wealth fund after Goldman arranged financing for the group.
Last month, the country’s finance minister said it would seek an eye-popping $7.5bn in reparations from Goldman over the affair – a demand that would potentially make this one of the bigger financial scandals of recent years. Needless to say, Goldman officials vehemently deny any wrongdoing (and thus the need to pay), blaming local Malaysian officials instead. But, as the battle gathers pace, it is worth considering a bigger question: is the number of financial scandals increasing?
If you were to ask ordinary investors, many might say “yes”. Even before the 1MDB story broke, the past decade has delivered a litany of scandals, ranging from last year’s revelations of accounting irregularities at British companies such as Carillion and Patisserie Valerie to Toshiba in Japan in 2015. And let’s not forget the uncovering of the Bernie Madoff investment swindle, Libor manipulation and subprime mortgage scandals before that.