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The Financial Conduct Authority and the Prudential Regulation Authority, the UK financial watchdogs, have slammed a £96.6 million fine on Goldman Sachs International for a failure of risk management processes and their role in the 1MDB scandal.
The scandal arose after the new Malaysian government began to question financial transactions at the state-owned development company 1MDB, in which GSI performed the role of the underwriter for at least three bonds transactions in 2012 and 2013. Goldman Sachs International. GSI was also accused of not addressing bribery allegations levelled against it, as well as several claims of misconduct. The bank’s staff are also alleged to have aided the embezzlement of a total of $6.5 billion in the Malaysian investment fund.
Goldman Sachs is not taking this case lightly. CNBC is reporting that the bank is set to take back millions of dollars previously paid to ex-CEO Lloyds Blankfein and current CEO David Solomon over the scandal. The bank is also said to be moving to reach a settlement with US authorities over the scandal.
Goldman Sachs remains bullish today with a 0.93% gain, but the stock could find itself under pressure in the days to come.
Goldman Sachs is stuck in the middle of a range that has 199.63 as price support and 214.83 as the price ceiling. The 4-hour chart shows that price is generally in a correction following the upside move of 23 September to 12 October. Price now clusters around the 38.2% Fibonacci retracement of this move, at 200.22. A bounce from this area targets 207.94 (23.6% Fibonacci retracement) and 211.39, in that order, 214.83 remains the range’s ceiling, which is the only barrier between price and the 220.0 price resistance.
On the other hand, a decline below 200.22 brings 196.77 (61.8% retracement) into the picture, with 191.86 and 189.33 remaining relevant as downside targets in the near-term.
