People
&Markets
Jessica Li has been
promoted to head of
Asia healthcare
investment banking for
BANK OF AMERICA
MERRILL LYNCH,
effective January 1.
Based in Hong Kong,
she will report to Alex
To, head of Asia-Pacific
investment banking,
and Thomas Sheehan,
head of globalhealthcare investment
banking. Li joined
BAML in 2015 and led
its Greater China
healthcare research.
She is a replacement
for Michael Chiu, who
recently quit to join
Goldman Sachs as co-
head of healthcare
investment banking for
Asia ex-Japan.Russian broker BCS
GLOBAL MARKETS
has appointed five new
analysts as it seeks to
expand its research
coverage to central
Asia and the Caucasus.
Anastasia Egazaryan
has joined from UBS to
cover industrials and
real estate. Dmitry
Skyrabin will cover
retail and utilities,while Yulia Goldina has
joined as an equity
strategist. Elena
Tsareva (left) and Maria
Sukhanova have joined
from Sberbank to
focus on financial
services and TMT,
respectively.Please contact us if you have information about job moves: [email protected]
Goldman bankers indicted in
1MDB fraud case
4HEû53û$EPARTMENTûOFû*USTICEûCHARGEDûTWOû
former GOLDMAN SACHS bankers and a
-ALAYSIANûlNANCIERûWITHûDEFRAUDINGû-$" û
THEû-ALAYSIAû$EVELOPMENTû"ANK ûFORûSTEALINGû
billions from the proceeds of bond sales and
using the cash to buy real estate, art work
ANDûTOûFUNDû(OLLYWOODûlLMS
Goldman has so far dodged a bullet in the
CASEû$/*ûOFlCIALSûUNDERûTHEûPREVIOUSû
Obama administration were also looking at
whether there was a case to be made against
THEûBANKûINûTHEû-$"ûSCANDAL
!ûTHREEûCOUNTûINDICTMENTûWASûlLEDûONû
Thursday against former Goldman bankers
Tim Leissner and Roger Ng and Malaysian
lNANCIERû*HOû,OWûINû.EWû9ORK ûINCLUDINGû
bribery, money laundering and
circumventing internal audit controls.
The charges were brought under the
Foreign Corrupt Practices Act.
While the indictment lays out how
bankers aggressively misled the compliance
and intelligence groups at Goldman to get
the bank involved, it also suggests that it
was relatively easy to do.
The business culture at Goldman,
“particularly in Southeast Asia, was highly
focused on consummating deals at times
prioritising this goal ahead of proper
operation of its compliance functions,” the
indictment said.
Goldman was sole bookrunner and
ARRANGERûFORûTHREEûBONDSûISSUEDûBYû-$"ûINû
2012 and 2013, two US$1.75bn offerings and
a US$3bn bond, taking roughly US$600m in
fees. The bank won the assignment,
according to the indictment, due to a
SCHEMEûCOOKEDûUPûBYû.GûTOûBRIBEûOFlCIALSûINû
-ALAYSIAûANDû!BUû$HABI
Other employees and agents of Goldman
knew that bribes had been promised andconspired to conceal that information from
the bank’s compliance group, the indictment
said. But “given the lucrative nature of the
transactions the system at Goldman proved
easy enough to circumvent.”
One securities lawyer said the phrasing
SUGGESTEDûTHEû$/*ûWASûLOOKINGûATûWHETHERû
the compliance was intentionally easy to
circumvent. “It could mean Goldman is not
out of the woods yet,” the lawyer said.
!ûSPOKESMANûFORû'OLDMANûSAIDûh4HEûlRMû
continues to cooperate with all authorities
investigating this matter.”BANKER SUSPENDED
Leissner, a former partner for Goldman in
Asia, has already pleaded guilty to
conspiracy to launder money and conspiracy
to violate the FCPA, and agreed to forfeit
US$43.7m.
Ng has been arrested in Malaysia and is
expected to be extradited to the US to stand
trial. Low is on the run.
According to prosecutors, the proceeds
from the offerings were transferred to the US
and then to shell companies, giving Ng and
others easy access to pay kickbacks, bribes,
and buy real estate and art. Of the US$6.5bn
RAISEDûBYû-$" ûNEARLYû53BNûWASûSTOLEN
Another Goldman banker appearing in
the indictment against Leissner as a co-
conspirator matches the description of its
former co-head of investment banking in
Asia, Andrea Vella. The indictment refers to
an Italian national who was employed as a
managing director and agent from 2007 to
present.
Vella has been put on leave from the bank
pending a review of the alleged conduct,
according to a source at the bank.
Philip Scipio53BNû)TSûPRETAXûPROlTûIMPROVEDûTOû
US$5.92bn from US$4.62bn a year ago. On
an adjusted basis, excluding the effects of
currency translation and movements in
SIGNIlCANTûITEMS ûPRETAXûPROlTûROSEûûTOû
US$6.19bn.
POSITIVE JAWS
The results showed costs were under control,
after worries the bank would fail to achieve
positive “jaws” for the full year - or revenues
rising faster than costs. Adjusted jaws stood at
negative 1.6% at the end of September compared
with negative 5.6% at the end of June.
Flint said the latest results proved the
bank’s strategy remained on track.
“There are some global headwinds or
reasons for anxiety - trade wars, Brexit, etc,
equity market jitters. But none of those at
this stage change the strategy we’re
employing,” Flint said. “If we saw the outlook
DETERIORATINGûSIGNIlCANTLYûTHENûWEûJUSTûTRIMû
our plans to spend money and invest.”
Thomas Blott, Steve Slater
so far during 2018. At the end of September
its leverage ratio was 4% on a fully loaded
basis, up 0.2% over the year. “The bank has
REAFlRMEDûITSûGOALûOFûRAISINGûTHISûRATIOûTOû
ûOVERûTIME vû$EUTSCHEûSAID
The tests measured the ability of banks to
withstand theoretical market shocks, such
as slumps in property prices, a sell-off in
stock markets and government bonds, an
economic recession, and a disorderly Brexit.
The EBA and its predecessor have been
conducting stress tests on European banks
since 2009. The process is not as developed as
the US stress test process, but it is moving in
that direction. Supervisors can use the results
to determine how much capital banks should
hold, whether they should sell assets, or how
much capital they can pay out.
Steve Slater, Christopher Spink