Singapore bans ex-Goldman Sachs banker from finance industry for 1MDB links

Singapore's central bank imposed a 10-year industry ban on Tim Leissner, a former director of Goldman Sachs in the city state, for his involvement in the scandal-hit Malaysian state investment fund 1Malaysia Development Berhad (1MDB).

Under the prohibition order that took effect Monday, Leissner is not allowed to perform any regulated activities under Singapore's Securities and Futures Act and manage, directly or indirectly, any capital markets services firm in the country, the Monetary Authority of Singapore (MAS) said in a statement.

MAS's move against Leissner had been telegraphed in 2016.

Leissner was a representative of Goldman Sachs Singapore from June 2002 to February 2016. He was a director from June 2007 to September 2011. He moved to Hong Kong in November 2011, but retained his representative status with the bank's Singapore arm until his resignation last year.

Signage for 1Malaysia Development Bhd. (1MDB) is displayed at the site of the Tun Razak Exchange (TRX) project in Kuala Lumpur, Malaysia.
Goh Seng Chong | Bloomberg | Getty Images

Investigations found that Leissner issued an unauthorized reference letter to a financial institution based in Luxembourg in June 2015 using the letterhead of Goldman Sachs (Asia). The letter, sent without the bank's knowledge, said Goldman Sachs had conducted due diligence on Malaysian tycoon Low Taek Jho and had not detected any money laundering concerns.

Low has since been identified as a "key person of interest" in allegations of illegally moving 1MDB funds — a case currently investigated by jurisdictions globally including the U.S., Switzerland, Singapore and the Seychelles.

"MAS will not tolerate conduct by any finance professional that threatens to undermine trust and confidence in Singapore's financial system. MAS will not hesitate to bar such individuals from carrying out regulated activities in the financial industry," said Ong Chong Tee, the central bank's deputy managing director for financial supervision, in the statement.

"It is imperative that industry professionals and representatives of financial institutions are fit and proper persons. They must be worthy of the trust that people place in them and their institutions."

MAS began investigations into 1MDB-related breaches in March 2015. It shut down two Swiss-based private banks, BSI and Falcon, fined several other financial institutions, including Standard Chartered and UBS, and it hauled a number of individuals to court.

In its statement on Monday, the central bank also said it issued lifetime prohibition orders on former branch manager of Falcon Bank, Jens Fred Sturzenegger, and former BSI Bank representative Yak Yew Chee. Another ex-BSI banker, Yvonne Seah, received a 15-year ban.

'Perfectly clear' billions illegally extracted from 1MDB: Journalist
'Perfectly clear' billions illegally extracted from 1MDB: Journalist

Questions about movement of funds from 1MDB came to widespread attention when the Wall Street Journal reported that in 2013 nearly $700 million had flowed from the debt-ridden fund to Malaysian Prime Minister Najib Razak's personal bank account.

Najib has repeatedly denied wrongdoing and, under pressure from the outcry caused by the report, said the funds were a private donation from a Middle Eastern country he declined to name. He has denied benefiting personally from the funds.

Malaysian Attorney General Mohamed Apandi Ali later said that Saudi Arabia's royal family gave Najib a $681 million gift, of which about $600 million was later returned. Apandi said that no criminal offense had been committed.

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