New Goldman Sachs boss: Accusations our employees broke the law in 1MDB are ‘horrible’

The chief executive of Goldman Sachs has said he feels “horrible” about accusations that the bank’s former employees broke the law when handling Malaysian state investment fund 1MDB.

The scandal over 1Malaysia Development Berhard (1MDB) has already claimed the scalp of long-serving prime minister Najib Razak, who was rejected at the polls earlier this year.

Last week former Goldman partner Tim Leissner pleaded guilty to conspiracy to launder money and breaking the US Foreign Corrupt Practices Act. He agreed to hand over nearly $44m (£33m).

Roger Ng, another former banker, is facing extradition to the US after being arrested in Malaysia last week.

Meanwhile a financier and Hollywood mogul, known as Jho Low, remains at large. He had previously denied charges filed against him in Malaysia, arguing that he would not receive a fair trial in the country.

“I feel horrible about the fact that people who worked at Goldman Sachs, and it doesn't matter whether it's a partner or it's an entry-level employee, would go around our policies and break the law,” new chief executive David Solomon said, speaking to Bloomberg TV in Singapore.

When asked if he could promise senior management had not suspected any wrongdoing, Solomon said: “We take compliance and control in our firm extremely seriously, we always have […] We are going to continue to co-operate with the authorities and there's a process in place and that process will proceed.”

Court filings show the bank got around $600m in fees for its work with 1MDB, including bond offerings raising $6.5bn. The government of Malaysia has said it could look to recover costs from Goldman Sachs.

The US Department of Justice believes an estimated $4.5bn was fraudulently diverted from 1MDB fundraising between 2009 and 2014.

Leissner and Ng are alleged to have bribed officials in Malaysia and Abu Dhabi, including at 1MDB.