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Goldman chief apologizes to Malaysian people for 1MDB

Solomon seeks to reassure investors as stock price suffers

Goldman Sachs CEO David Solomon spoke to investors on Jan. 16.   © Reuters

NEW YORK -- Goldman Sachs CEO David Solomon apologized to the Malaysian people on Wednesday for the involvement of a former partner in the corruption scandal that engulfed state development fund 1Malaysia Berhad, known as 1MDB.

"It is very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the Malaysian government," said Solomon, who became CEO of the U.S. investment bank in October.

Former Goldman partner Tim Leissner "by his own admission was one of those people," Solomon said. "For Leissner's role in that fraud, we apologize to the Malaysian people."

Solomon made the comments on an earnings call with analysts and investors, the first time since the bank's 1999 listing that a Goldman CEO has participated in an earnings briefing. Goldman's stock has been falling over concerns of the impact of the 1MDB scandal.

Solomon stressed that the bank itself was not involved in wrongdoing.

Goldman served as the Malaysian state fund's underwriter, and earned about $600 million in fees from bond issues. But part of the money raised was embezzled and used as bribes.

The U.S. Justice Department unsealed charges against Leissner and another Goldman banker in connection to the scandal in November, while Malaysian authorities filed criminal charges against a Goldman unit in December.

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