DOL Delay on Goldman Sachs Exemption Puts Off Bribery Sentencing

March 2, 2021, 7:08 PM

The U.S. Labor Department’s ongoing review of a waiver request that would allow Goldman Sachs Group Inc. to continue managing retirement assets has caused a three-month delay in a federal judge’s sentencing of the banking giant’s subsidiary for bribery.

A Brooklyn judge agreed Tuesday—a day before it was scheduled—to postpone the sentencing of Goldman Sachs Malaysia to June 9. The U.S. attorneys prosecuting the case requested that the judge push back the date to give DOL’s Employee Benefits Security Administration additional time to make a final determination on granting Goldman an exemption that would avoid disruption to clients’ 401(k) and pension plans.

DOL proposed in January issuing an exemption that would maintain Goldman’s status for five years as a qualified professional asset manager, or QPAM, notwithstanding its subsidiary’s guilty plea in a global bribery scheme. The public comment period on that proposal expired Feb. 10.

“It is our understanding ... DOL will need some additional time to reach a final decision on Goldman Sachs’ application” for an exemption, the attorneys wrote in requesting an adjournment of the sentencing hearing.

The Wall Street firm applied for exemptive relief because of a requirement under the 1974 Employee Retirement Income Security Act for companies facing felony convictions.

The deal reached with the U.S. government holds Goldman’s Malaysia unit responsible for raising billions for a state investment fund intended to support Malaysian citizens. Much of the fund was stolen by people tied to the former prime minister and spent on high-end art, real estate, and financing for the film “The Wolf of Wall Street.”

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editor responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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