Goldman Sachs (NYSE:GS) stock rose 2.08% on December 18 as U.S. indexes enjoyed a slight bump up after a brutal Monday trading session.
Shares of Goldman Sachs have plunged 15% over the past month as the bank has been embroiled in a crisis involving an investment fund called 1MDB.
Reports indicate that two Goldman bankers helped a Malaysian financier take billions from the fund. Tim Leissner, one of the two bankers, plead guilty to bribery charges in August.
Roger Ng, a managing director at Goldman, has been arrested in Malaysia. Goldman is attempting to throw cold water on the crisis, stating that this is a case of a few bad actors. However, critics argue that higher-ups must have had knowledge of deals that were operating at this scale.
The news is horrible timing for Goldman and represents its deepest crisis since the great recession. Coming into the final weeks of 2018 Goldman’s investment banking arm was a huge bright spot in a year that has been defined by record profits and a weakening share price. This is largely due to the priced-in tax reform trade.
Current CEO David Solomon and chief financial officer Stephen Scherr are among those responsible for vetting the deals in question. On Monday Malaysia filed criminal charges against the bank, seeking $3.3 billion.
Goldman’s legal troubles come at an inopportune time as the U.S. stock market is suffering its worst swoon since the financial crisis. Investors should steer clear of Goldman in the near term.
This article provided by NewsEdge.