Goldman Sachs says Leissner hid $20 million tied to 1MDB fraud

Goldman Sachs is trying to recover more than $20 million from former star banker Tim Leissner, saying he secretly collected the money while helping carry out the 1MDB fraud. The firm is seeking repayment with interest, a move that keeps one of Wall Street’s most notorious scandals alive years after the original deals were unwound and the reputational damage spread far beyond the trading floor.

The push matters inside Goldman because Leissner was not a peripheral figure. He sat at the center of the 1Malaysia Development Berhad bond work, and Goldman has already said the bank did not adequately address red flags or scrutinize Leissner and outside parties closely enough during the transactions. That admission landed in October 2020, when Goldman said regulators in the United States, United Kingdom, Singapore and Hong Kong had announced settlements resolving the 1MDB investigations. For employees who lived through the fallout, the latest recovery effort is another reminder that the firm is still drawing boundaries around misconduct, bonus money and the cost of broken controls.

Malaysia’s Finance Ministry said in July 2020 that Goldman agreed to a total $3.9 billion settlement over the three 1MDB bond transactions it structured and arranged. The package included a $2.5 billion cash payment and a guarantee of at least $1.4 billion in asset recovery value, with support for an asset-recovery specialist. The ministry said more than $4.5 billion would eventually be returned to Malaysians when combined with money already received from the U.S. Department of Justice. Malaysia also said the settlement acknowledged misconduct by two former Goldman employees in the broader fraudulent scheme, while leaving intact its claims against Jho Low and others.

Goldman’s effort to recover Leissner’s money is not new. The bank won a FINRA arbitration award in 2022 that ordered him to pay about $20.67 million, and a Manhattan federal judge upheld that award the following year. Goldman’s legal team later said Leissner had not repaid any of the money. The latest demand underscores how the bank is still working through the compensation, governance and control failures tied to 1MDB, even as it faces shareholder litigation and has agreed in principle to settle a class action accusing it of misleading investors about the scandal.