Summary

Goldman Sachs’ exposure to the 1MDB scandal continues to worsen. On Monday the axe finally came down in Malaysia as prosecutors sued to recover over $3 billion from Goldman bankers and subsidiaries, accusing the bank of assisting in “dishonestly misappropriating” $2.7 billion worth of bonds issued by the 1MDB fund.

Back in the United States, where the US Department of Justice originally initiated the 1MDB investigations, Goldman employees have been receiving subpoenas from regulators in New York.

With two major investigations ongoing and high-profile litigation to come in Malaysia, the bank is faced with its biggest crisis since the Great Recession. The negative outlook is also weighing on its stock price, which has shed some 25% of its value since Goldman bankers were first named in an unsealed DOJ indictment earlier this year.