<!-- Swiftype Variables -->

Courts

Cleveland funds demand probe into Goldman’s involvement in 1MDB scandal

Law firm Grant & Eisenhofer has sent a letter to Goldman Sachs Group (GS) on behalf of two institutional shareholders demanding the bank begin an independent investigation of Goldman Sachs' involvement in the 1MDB scandal.

The May 3 letter, sent on behalf of Cleveland Bakers and Teamsters Pension Fund and the Cleveland Bakers and Teamsters Health and Welfare Fund, demanded an independent investigation of current and former Goldman Sachs board members and officers who "permitted Goldman to facilitate disastrous bond deals that proved ruinous for Malaysia's sovereign wealth fund."

In December, the Malaysian government filed criminal charges against Goldman, saying it had misled investors when the bank knew that proceeds from 1MDB bond sales it arranged would be misappropriated. Goldman Sachs raised about $6.5 billion for 1MDB, a state-owned investment fund, in 2012 and 2013 and has blamed rogue employees for any wrongdoing in relation to the fund. Former Goldman partner Tim Leissner pleaded guilty to U.S. bribery charges, Roger Ng, his former deputy, was arrested in Malaysia, and a third Asian executive was placed on leave by the bank.

The letter demanded an investigation by independent and disinterested directors to determine "which current or former Goldman employees, officers and directors are liable for the wrongful conduct causing harm to the company" and "determine the extent to which Goldman was damaged by the wrongdoing described herein."

Goldman spokesman Richard L. "Jake" Siewert Jr. said in an email that the bank has received the letter and is currently reviewing it.

Nathan A. Cook, director at Grant & Eisenhofer and author of the letter, said he would let the letter speak for itself and added, “Obviously there’s a lot there and we hope they do what we asked.”