
How Will Goldman Sachs (GS) Stock Be Affected by Malaysian Fund Scandal?
NEW YORK (TheStreet) -- Goldman Sachs (GS) - Get Report is under fire this morning after the U.S. government alleged that Malaysian sovereign wealth fund 1MDB diverted billions of company dollars from bond sales issued by Goldman Sachs for the personal use of 1MDB officials, Reuters reports.
In 2012 and 2013, Goldman assisted the fund in raising $6.5 billion in three separate bond sales to invest in energy projects and real estate. The investments were meant to boost the Malaysian economy.
However, the U.S. Department of Justice accused 1MDB of diverting $2.5 billion of those earnings to company officials, relatives and associates to purchase artwork and properties and to pay off gambling debts.
Offering circulars for the 2012 bonds contained "material misrepresentations and omissions" of what the proceeds would be used for, the Justice Department said.
Goldman Sachs made $600 million to underwrite the bonds, but has not yet been accused of wrongdoing in the scandal.
Shares of Goldman Sachs closed up 0.22% to $161.77 on Wednesday.
Separately, TheStreet Ratings rated this stock as a "hold" with a ratings score of C.
The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and growth in earnings per share. However, TheStreet Ratings finds weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.
You can view the full analysis from the report here: GS
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.










