Employees at Goldman Sachs are worried that potential fines from the 1MDB scandal will eat into bonuses.
“They’ll find any excuse to cut comp,” said one trader in equities.
Bonuses are a big part of trader compensation — Wall Street bankers make healthy base salaries, but the annual bonus is where the industry’s best earn their fortunes.
Goldman Sachs traders are wringing their hands ahead of this year’s bonus season, one of the most emotional times on Wall Street.
The sudden prospect of billions of dollars in potential fines from the IMDB Malaysian sovereign wealth fund scandal has some traders worried that the bank has found a useful scapegoat to scrimp on bonuses. Employees will learn about their annual pay numbers next week.
“They’ll find any excuse to cut comp,” said one trader in equities. Another said the possibility of the 1MDB scandal eating into employee compensation was definitely a worry, though predominantly among the more “pessimistic” at the bank. The traders were based in Goldman’s New York and London offices.
The 1Malaysia Development Berhad fund, or 1MDB, is one of the biggest financial scandals in history and the subject of corruption and money-laundering investigations in at least six countries. Goldman earned roughly $600 million in fees for raising $6.5 billion for the fund. Malaysia has said $2.7 billion of the proceeds of three 1MDB bonds was misappropriated, and is seeking “well in excess” of that amount in fines. The US Department of Justice, among other authorities, is also investigating.
Regarding the 1MDB criminal charges, Goldman has said to Business Insider: “We believe these charges are misdirected, will vigorously defend them and look forward to the opportunity to present our case. The firm continues to cooperate with all authorities investigating these matters.”
1MDB has dominated the Goldman headlines in the last …read more
Source:: Business Insider