Goldman Sachs may need to boost its legal reserves by as much as $1 billion to prepare for potential penalties related to its dealings with the Malaysian sovereign wealth fund 1MDB, analysts said.
The investment bank has been under scrutiny for its role in helping raise funds through bond offerings for 1Malaysia Development Bhd (1MDB), which is the subject of corruption and money-laundering investigations in at least six countries.
US prosecutors have brought criminal charges against two former Goldman bankers. Goldman has consistently denied any wrongdoing.
The bank is in “active conversations” with the Department of Justice and has been for almost two years, Chief Operating Officer John Waldron said in a CNBC interview on Tuesday.
In November, the bank disclosed in a securities filing that it may face penalties from dealings with 1MDB.
In interviews this week, analysts said Goldman might have to set aside $500 million to $1 billion for legal reserves in the next few quarters to prepare for potential fines. The bank does not disclose its total reserves.