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NY-based financial institution and various individuals charged in Malaysia

Financial Crimes FCPA DOJ Anti-Money Laundering

Financial Crimes

On December 17 and 19, press reports indicate Malaysian prosecutors filed criminal charges against a New York-based financial institution and numerous individuals, including former executives of the financial institution, in connection with their alleged roles in a multi-billion bribery and money laundering scheme involving Malaysia sovereign wealth fund.

Malaysian prosecutors charged the financial institution with making false and misleading statements when raising money for the fund. Among individuals, a former participating managing director of the financial institution, and a former managing director, also were charged. These charges follow the U.S. government’s investigation and charges related to the same scheme.

As detailed in prior FCPA Scorecard coverage, the former participating managing director pleaded guilty in November to Conspiracy to Violate the FCPA and Conspiracy to Commit Money Laundering and agreed to forfeit $43.7 million. The DOJ charged the former managing director with similar offenses and, according to press reports, is fighting extradition to the United States.

According to press reports, in response to the filing of the criminal charges in Malaysia, the financial institution stated: “Under the Malaysian legal process, the firm was not afforded an opportunity to be heard prior to the filing of these charges against certain financial institution entities, which we intend to vigorously contest. These charges do not affect our ability to conduct our current business globally.”

The DOJ has not charged or reached a resolution with the financial institution, which previously announced that it was cooperating with the DOJ’s and all regulators’ investigations. The announcement of the Malaysian charges suggests that the U.S. DOJ and Malaysian prosecutors may not be coordinating efforts.

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