A former Goldman Sachs Group Inc. senior banker linked to alleged financial fraud involving Malaysian state fund 1Malaysia Development Bhd. was barred from the U.S. securities industry for failing to cooperate with a regulator's investigation.
The Financial Industry Regulatory Authority, a U.S. industry body, said it issued its ban on Tim Leissner on Sept. 11, after the former banker didn't respond to requests for documents and other information stemming from his departure from Goldman in early 2016.
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Mr. Leissner was suspended by Goldman and later quit the Wall Street firm after it discovered he had written an unauthorized letter vouching for Jho Low, a Malaysian businessman who is at the center of international probes alleging that billions of dollars were stolen from the state investment fund, The Wall Street Journal has reported.
"Without admitting or denying the findings, Mr. Leissner consented to the sanction and to the entry of findings," the regulator wrote in Mr. Leissner's file, noting that Mr. Leissner failed to provide Finra with certain requested documents and information during the course of an investigation into a reference letter that led to his departure from Goldman.
A Finra spokeswoman and a spokesman for Goldman Sachs declined to comment. A spokesman for Mr. Leissner didn't immediately respond to a call for comment. Mr. Low has previously denied wrongdoing, as has 1MDB, which has said it would cooperate with the investigations.
U.S. Justice Department investigators are trying to determine whether Goldman had reason to suspect that money it helped 1MDB raise was misused and, if so, whether the bank was obligated to report any concerns to authorities. The Federal Reserve, the Securities and Exchange Commission and New York state's Department of Financial Services also have undertaken examinations of some of the bank's actions, as have Singapore authorities, the Journal reported last year, citing people familiar with the matter.
Goldman had raised $6.5 billion for the fund and earned nearly $600 million in fees, making the Malaysian client among its most lucrative, the Journal reported at the time. Goldman has previously said it did nothing wrong and had no way of knowing there might be fraud surrounding 1MDB.
Central to Goldman's 1MDB dealings was Mr. Leissner, a senior investment banker and chairman of the firm's Southeast Asia office until his departure.
In June 2015, Mr. Leissner wrote to Banque Havilland, a small Luxembourg private bank, vouching for Mr. Low, who wanted to open an account there, the Journal reported, citing people familiar with the matter. The letter said Goldman had done due diligence on Mr. Low and found no issues. Banque Havilland hasn't responded to requests for comment.
Goldman compliance executives unearthed the document in a January 2016 email search, The Journal reported. The firm said it confronted Mr. Leissner about the letter, which violated its policies, and he resigned the next day.
Later, Singapore's Monetary Authority cited the letter in barring Mr. Leissner from doing business in the city-state for a decade.
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(END) Dow Jones Newswires
October 03, 2017 17:41 ET (21:41 GMT)