Goldman Sachs ($GS) 1MDB Bond Deal and Jho Low Involvement Case

The court has ruled on whether the plaintiffs are certified as a class.

S.D. New York

Court

1:18-cv-12084

Case number

12/22/2016

Class period Start

11/08/2018

Class period End

$GS investors filed a claim against Goldman Sachs for allegedly hiding that Jho Low was central to the 1MDB bond deals and that the bank’s compliance and risk claims did not match what was happening inside the firm.
After reports tied Lloyd Blankfein to meetings with Jho Low and Najib that contradicted Goldman’s public denials, $GS fell 7.5% on November 12, 2018, closing at $206.05 per share.
$GS investors can join this case to be notified about potential recovery.
Case Details:

Between December 22, 2016 and November 8, 2018, Goldman Sachs told investors it had no evidence Jho Low was involved in the 1MDB bond transactions and that its risk management, integrity, and compliance standards were strong. Executives also emphasized that the bank’s large fees reflected real underwriting risk.

However, during this period, investors allege Goldman Sachs was far more deeply involved with Low and the 1MDB deals than it admitted, despite internal warnings and obvious red flags. Goldman Sachs allegedly failed to disclose that Low was a key intermediary known inside the bank, that Goldman had visibility into suspicious diversion of 1MDB proceeds and major corruption risks, and that its outsized fees did not reflect unusual underwriting risk because the bond deals were effectively pre-sold and carried little real exposure.

Then, on November 8, 2018, reports revealed that Blankfein had met with Najib and Low in 2009 regarding 1MDB, undercutting Goldman’s public effort to distance itself from Low. 

$GS fell $9.00, closing at $222.65. Additional revelations followed on November 9, 2018, including reports that Blankfein also met with Low and Najib in 2013 after compliance concerns had already been raised. By November 12, 2018, shares had dropped to $206.05, representing a total decline of 11.1% over the correction period.

Based on these events, $GS investors filed a claim against Goldman Sachs, alleging the company:
It hid Jho Low’s role in the 1MDB deals.
It downplayed red flags, kickbacks, and the bank’s visibility into how 1MDB bond proceeds were being diverted.
It misled investors about its compliance controls and the legitimacy and risk of the fees it earned until new disclosures exposed Goldman’s deeper involvement.
Investors argue Goldman Sachs misled the market about its role in the 1MDB bond transactions, Jho Low’s involvement, and the strength of its compliance controls, causing losses when the truth emerged.

Case Type

US Securities Class Action

Case Status

Class Certification result

Alleged Offence

Misleading Statements,

Fraud,

Failure to Disclose,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Shock Event Date

11/09/2018

Filing date

12/20/2020

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