This article discussed how a high ranking Goldman Sachs' regional chairmen, Tim Leissner, is being investigated for fraud after it was discovered that a $681 million sum of money appeared in the bank account of Malaysian Prime Minister Najib Razak. The FBI has been investigating transactions, with possible evidence of money-laundering, across five different countries. Many on Wall Street say this is just the tip of the iceberg and that these type of corrupt practices are still prevalent all over the world, but more more so in developing countries like Malaysia.
Corruption is defined as taking public resources or money for private gain and it is something that is a huge problem in international business for a variety of reasons. Sometimes it is culturally acceptable to bribe officials in other country, but in the United States it is completely legal due to the Foreign Corrupt Practices Act. This states that any U.S. company doing business overseas is not permitted to participate in any corrupt business practices, which is exactly was Tim Leissner did. I think it is good we have laws in place to reduce corruption because corruption is something that impedes economic growth and hurts the general population.
http://nypost.com/2016/02/13/goldman-sachs-banker-involved-in-a-massive-overseas-money-scandal/
It seems as though whether you grow up in a country where corruption is prevalent or grow up in a place like the US where corruption is punished, corruption is always a problem no matter where you turn. It is sad to see big companies like Goldman Sachs participate in these unethical acts in order to make more money or secure a relationship that will do so. While globalization opens a lot of doors for businesses sadly not all of these are ethical. Given this I think corruption needs to be more closely watched in organizations and stricter punishments need to be enforced in order to try and stop this from occurring and to promote ethical business throughout the world.
ReplyDeleteWe see powerful companies sometimes participate in these practices because they know they can buy out powerful officials in corrupt countries to make more money abroad and because of extradition laws it cannot be taxed or brought back to the US. Hopefully with the FBI closing in on this individual from Goldman Sachs, it will lead to many more arrests of other individuals involved in such criminal activities..
ReplyDeleteEvery year new laws and regulations are put into place that are supposed to stop corruption. Yet every year people find a new way around it. The truth is, it is simply too hard to discover all fraudulent activity, even at a high level. There are so many transactions that are looked at and it is almost impossible to find one that raises a red flag. Like the article says, this is a pretty widespread thing, and I would guess that many big banks are responsible. Hopefully this individual will be able to help FBI officials find more forms of corruption.
ReplyDeleteYeah people are people no matter what regulations you put in place there will be someone who will look the other way for some $. It can be frustrating that some people want lower tax for upper class, when many extremely wealthy people are finding ways to launder money and not pay taxes on their income. This causes the rich to get richer and the poor to get poorer. Those who value wealth so much are likely to do unethical things to become more wealthy. Just thought I'd rant a little!
ReplyDeleteThis has always been a problem on the wall street. With so many millions involved in becomes very enticing for the bankers to get a chunk of such a huge sum. These practices are usually illegal in most parts of the world with a few exceptions. These problems arise because the bankers know how to play around and cook the books in order to make everything fall in place but after the 2008 crisis the FBI has been more vigilant and a lot more cases such as this one have been coming out more often than before.
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