Page 1 of 2

The rejuvenated 1MDB case has thrown banks including Goldman Sachs back into the spotlight. finews.com chronicles Switzerland's role in the graft scandal called «kleptocracy at its worst».

Jordan Belfort, a convicted felon on whom 2013 blockbuster «Wolf of Wall Street» was based, said he knew something was rotten in 2011. «These guys are fucking criminals,» Belfort told finews.com last year. He was referring to spendthrift Malaysians reportedly linked to sovereign wealth fund 1MDB.

Eight years later, two ex-Swiss private bank directors face charges in Abu Dhabi, and Goldman Sachs is under pressure to pay Malaysia back a whopping $600 million in fees for running 1MDB bonds.

Switzerland’s attorney general is investigating now-defunct BSI (Banca della Svizzera Italiana), and Falcon Private Bank as well as six people over 1MDB. Swiss financial regulator Finma slammed both banks for holes in money laundering prevention, and sanctioned several more including UBS.

Shot in the Arm

A new government in Malaysia has given a shot in the arm to a global investigation into a $4.5 billion graft scandal. Malaysia’s ex-ruling political class is in the front line, but the probe also opens old wounds for banks as the Swiss investigations hum along.

Belfort’s frank words to finews.com about Jho Low, a mysterious, baby-faced Malaysian millionaire who had helped to bankroll the Martin Scorcese-directed blockbuster, were cited in «Billion Dollar Whale». The recently-released book by «The Wall Street Journal» reporters Tom Wright and Bradley Hope tracks the steep ascent and deep pockets of Low and others including Riza Aziz, a stepson of the former Prime Minister of Malaysia, in the U.S.

«Fucking Criminals»

«I don’t need these fucking people,» Belfort realized after observing their extravagant spending at a film launch party in Cannes. The bubble has burst: Aziz’s production company, Red Granite, which bankrolled «The Wolf of Wall Street», was forced to cough up $60 million in the U.S. to settle charges (it reportedly had to tap a Wall Street lender to do so).

Aziz’s family is worse off: his stepfather, former Prime Minister Najib Razak, and mother, Rosmah Mansor, face multiple counts of money-laundering and corruption in a criminal trial early next year.

The political turbulence has implications for banks as well, mainly for Goldman Sachs for now. The U.S. investment bank is accused of pocketing a whopping 10 percent fee for running a total of $6 billion in bonds for 1MDB. Malaysian politician Anwar Ibrahim, the country’s likely next PM, said this week he wants Goldman to return the fees.