B2 News Finance & Economics · May 22, 2026

Goldman Sachs to pay shareholders $500M in 1MDB settlement

Goldman Sachs agrees to pay shareholders $500 million over its role in the massive 1MDB fraud.

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Goldman Sachs has agreed to pay $500 million to settle a class-action lawsuit brought by shareholders who claimed the bank misled them about its involvement with 1MDB, Malaysia's state investment fund. The settlement was disclosed in a court filing, with attorneys for Sjunde AP-Fonden — a Swedish pension fund and lead plaintiff — calling it "an outstanding result for the class." A judge still needs to give final approval.

The 1MDB scandal is one of the biggest financial frauds in history. Between 2009 and 2014, around $4.5 billion was embezzled from the fund to bankroll the lavish lifestyles of the scheme's orchestrators. Goldman had helped the Malaysian government raise $6.5 billion through bond sales, collecting roughly $600 million in fees — and shareholders alleged the bank deliberately downplayed its role in the fraud. Goldman's share price suffered due to its involvement with 1MDB, shareholders alleged, which is what drove the original lawsuit filed back in 2018.

This $500 million settlement is just the latest chapter in a very expensive saga for Goldman. The bank previously paid the Malaysian government $3.9 billion and admitted criminal wrongdoing in a $2.9 billion settlement with the U.S. Justice Department and regulators in the U.K., Singapore, and Hong Kong. The bank also clawed back $174 million from current and former executives for their roles in the case.

Two former Goldman executives, Tim Leissner and Roger Ng, were sentenced to prison for orchestrating the scheme. A Federal Reserve consent order against the bank was resolved last year, but the financial and reputational damage from 1MDB continues to cast a long shadow over Goldman's legacy.

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📚 Key vocabulary

embezzle (verb)
to secretly steal money that you are responsible for managing at work
"The finance director was arrested after it was discovered he had embezzled funds from the company pension scheme."
class-action lawsuit (noun)
a legal case where a large group of people with the same complaint sue someone together
"Thousands of customers filed a class-action lawsuit against the airline after their flights were cancelled without refunds."
claw back (verb)
to take back money or benefits that were previously given, especially after wrongdoing is discovered
"The company clawed back bonus payments from the sales team after the results turned out to be based on false data."
consent order (noun)
an official agreement, often with a regulator, where a company agrees to follow certain rules or restrictions without admitting guilt
"The bank operated under a consent order for three years before regulators confirmed it had fully addressed its compliance failures."
downplay (verb)
to make something seem less important, serious, or significant than it really is
"The CEO downplayed the impact of the data breach during the press conference, which later angered shareholders."

✨ Useful phrases for this topic

"admit criminal wrongdoing"
Use this phrase when describing a situation where a company or individual officially accepts legal responsibility for illegal actions as part of a settlement or court process.
"As part of the agreement, the firm admitted criminal wrongdoing and agreed to pay a substantial fine to the regulator."
"cast a long shadow over"
Use this phrase to describe how a past event or scandal continues to negatively affect a person's or organization's reputation over time.
"The accounting fraud from a decade ago continues to cast a long shadow over the firm's efforts to attract new institutional investors."
"an outstanding result for the class"
Use this phrase (or adapt it) in a legal or negotiation context when describing a settlement or outcome that strongly benefits a group of claimants or stakeholders.
"After two years of litigation, the lead attorney described the compensation package as an outstanding result for the class of affected policyholders."

Advanced sentence structures

Patterns from this article you can use in meetings, emails, and everyday English

Structure 1

In context

Goldman's share price suffered due to its involvement with 1MDB, shareholders alleged.

The skeleton

Frame: [Subject] suffered due to its involvement with [noun phrase].

What it does: Links a negative outcome directly to a connection or participation in something.

Quick swap: "The company's reputation suffered due to its involvement with the data breach."

More examples

  • "The athlete's career suffered due to his involvement with the banned substances case."
  • "The charity's funding suffered due to its involvement with the controversial political group."
  • "The hospital's rating suffered due to its involvement with the misreported trial data."

Easy exercise

Arrange the words and add the missing structural elements to build a correct sentence.

  1. the bank · suffered · the 1MDB scandal · due to its involvement with
  2. the manager's promotion · due to its involvement with · suffered · the accounting irregularities
Show answers
  • "The bank suffered due to its involvement with the 1MDB scandal."
  • "The manager's promotion suffered due to its involvement with the accounting irregularities."

Open exercise

Write your own sentence using this structure. You can write about anything — here are some ideas if you need them:

  • A company or institution affected by a scandal or controversy
  • A colleague or team whose work was impacted by a difficult project
  • A sports team or public figure linked to a problem or controversy

One possible answer: "The construction firm's contract bids suffered due to its involvement with the bribery investigation."

Structure 2

In context

The bank clawed back $174 million from current and former executives for their roles in the case.

The skeleton

Frame: [Subject] clawed back [amount/resource] from [person/group] for [noun phrase].

What it does: Describes taking back money or resources from someone as a consequence of wrongdoing or poor performance.

Quick swap: "The government clawed back millions from contractors for their role in the failed infrastructure project."

More examples

  • "The university clawed back research funding from the department for its role in the fabricated study."
  • "The firm clawed back bonus payments from senior managers for their role in the compliance failures."
  • "The insurance company clawed back settlement funds from the claimant for misrepresentation."

Easy exercise

Arrange the words and add the missing structural elements to build a correct sentence.

  1. Goldman Sachs · $174 million · clawed back · current and former executives · their roles in the case · from
  2. the regulator · clawed back · the fund managers · improper gains · from · the market manipulation scheme · for
Show answers
  • "Goldman Sachs clawed back $174 million from current and former executives for their roles in the case."
  • "The regulator clawed back improper gains from the fund managers for the market manipulation scheme."

Open exercise

Write your own sentence using this structure. You can write about anything — here are some ideas if you need them:

  • A company reclaiming pay or bonuses after poor results or misconduct
  • A government recovering public money from a contractor or official
  • A sports organization taking back prize money or awards after a rules violation

One possible answer: "The pharmaceutical company clawed back performance bonuses from its sales team for their role in the misleading marketing campaign."

💬 Discussion questions

1

Goldman earned $600 million in fees from 1MDB bond sales — do you think banks have a moral responsibility to investigate where their fees come from, even when the deals are technically legal?

2

Goldman has now paid out billions of dollars in total over 1MDB, yet the bank is still one of the most powerful on Wall Street. What does that tell us about accountability in the financial industry?

3

If you worked in compliance or risk management at a large bank and discovered something that looked suspicious, what would you do — and what pressures might stop people from speaking up?

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