Goldman Sachs Group Inc. investors suing the bank over the 1MDB scandal are seeking sworn testimony from three former employees who live in the U.K.

Lawyers for the shareholders told a Manhattan judge in a court filing Monday that the testimony of Patrick Kidney, Toby Watson and Cyrus Shey is important to the lawsuit’s central claim that Goldman Sachs misled investors about its involvement with the Malaysian sovereign wealth fund and Jho Low, the financier who allegedly was the mastermind behind the looting of the fund.

Kidney, Watson and Shey served in roles that make them particularly knowledgeable about the bank’s dealings with Low and its work on three bond deals at the center of the corruption scandal totaling $6.5 billion that brought Goldman Sachs $600 million in fees, according to the filing.

Questioning of the three men “will seek to uncover information regarding red flags that arose during the bond approval process and the due diligence practices and procedures employed” by the committees on which they served, according to the filing.

Kidney, who was a member of the bank’s anti-money laundering team in London, testified as to warning signs about Low’s background in the case of the only Goldman Sachs banker to go to trial over the epic looting of the Malaysian fund. Roger Ng was convicted by a jury in April.

The class-action shareholder suit, filed in 2018, is led by Swedish pension fund Sjunde AP-Fonden.

In 2020, a Goldman unit admitted it had conspired to violate U.S. anti-bribery laws, the first guilty plea ever for the firm, founded in 1869. The bank paid more than $2.9 billion, the largest penalty of its kind in U.S. history, and more than $5 billion globally for its role in the scheme. Low is a fugitive.

The case is Plaut v. Goldman Sachs Group Inc., 18-cv-12084, U.S. District Court, Southern District of New York (Manhattan).

Source:
courtesy of BLOOMBERG

by Peter Blumberg

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