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Banking

DJ D-Sol drops another PR bomb

Goldman Sachs’ chief executive David Solomon could become a symbol of Wall Street indifference to the plight of others.

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Just one day after Goldman Sachs announced a settlement with Malaysia over the 1MDB fraud, David Solomon took to the stage in the Hamptons resort east of New York to party in the character of his music loving avatar DJ D-Sol.

It could certainly be argued that Goldman had agreed a deal with the Malaysians that was worth celebrating.

At one point the Malaysian government had been seeking $7.5 billion from Goldman over the 1MDB scandal – the entire $6.5 billion in debt that the bank helped to raise for the state funding vehicle, plus $1 billion in interest.

Instead, on July 24, Goldman announced that it would pay Malaysia $2.5 billion in cash and guarantee another $1.4 billion from sales of 1MDB assets that have been seized.

Goldman said that it has valued the assets and does not believe that this guarantee presents a big risk to the firm, so it may well have capped its exposure at $2.5 billion, while generating headlines about a $3.9 billion settlement.

Magic

That is something of a public relations sleight of hand – even though Goldman originally generated less than $600 million in fees from the controversial bond sales in 2012 and 2013.


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