One of the major characters in a global bribery and corruption scandal centered on Malaysia has been permanently banned from the US securities industry and ordered to surrender his ill-gotten payments.

The Securities and Exchange Commission today has charged former Goldman Sachs executive Tim Leissner for being involved in the multi-billion dollar corruption scam linked to Malaysian state-run fund 1MDB. He is permanently banned from the securities industry. 

The US regulator said that Leissner “obtained millions of dollars by paying unlawful bribes to various government officials to secure lucrative contracts for Goldman Sachs”. Leissner has agreed to a settlement of the alleged violations of the Foreign Corrupt Practices Act (FCPA). 

According to the SEC's order, beginning in 2012, Leissner, as participating managing director of Goldman Sachs, used a third party intermediary to bribe high-ranking government officials in Malaysia and the Emirate of Abu Dhabi. 

The bribes enabled the Wall Street firm to win business from 1 Malaysia Development Berhard (1MDB), including underwriting $6.5 billion in bond offerings. The order also found that Leissner personally received more than $43 million in illicit payments for his role in the bribery scheme.

"Individual conduct lies at the heart of all bribery schemes," Charles Cain, chief of the SEC enforcement division’s FCPA Unit. "Here, Leissner abused his leadership role at Goldman Sachs by engaging in a massive bribery scheme targeting the highest levels of two foreign governments in order to bring in lucrative business to the firm and enrich himself.”

Leissner consented to the SEC's order finding that he violated the anti-bribery, internal accounting controls, and books and records provisions of the federal securities laws and agreed to be permanently barred from the securities industry. The SEC's order requires Leissner to pay disgorgement of $43.7 million, which will be offset by amounts paid pursuant to a forfeiture order as part of a resolution in a previously instituted parallel criminal action by the US Department of Justice.

The SEC's investigation was conducted by Eric Heining and Paul G Block of the FCPA Unit and Mark Albers and Martin Healey of the Boston Regional Office. A raft of domestic US and Asian bodies, such as the Monetary Authority of Singapore, Securities Commission of Malaysia, and the Securities and Futures Commission of Hong Kong, were involved in the case. 

Goldman Sachs’ reputation has been hurt by the scandal; the bank has claimed that Leissner has concealed his criminal conduct from the bank’s management. 

The 1MDB was central to opposition forces winning a shock general election result in Malaysia last year. Authorities in Singapore have removed some banks’ licences, and regulators in Switzerland, the US and Singapore have probed into aspects of the case. In a bizarre twist, 1MDB-sourced money was used to finance the Wolf of Wall Street film, which was about a US fraudster.