Goldman Sachs Group Inc. reached an agreement in principle on April 22, 2026, to settle a long-standing class-action lawsuit brought by shareholders who alleged the investment bank misled them regarding its involvement in the 1Malaysia Development Berhad (1MDB) corruption scandal. The agreement was disclosed in a letter filed with the U.S. District Court for the Southern District of New York in Manhattan.
According to the court filing, Goldman Sachs and the lead plaintiffs have established the broad terms of a settlement and intend to submit a formal proposal for preliminary judicial approval by May 20, 2026. The specific financial terms of the settlement were not immediately disclosed in the initial filing. Goldman Sachs declined to comment on the reported agreement.
The litigation centered on claims that Goldman Sachs defrauded investors by making materially false and misleading statements about its business practices and internal controls. Shareholders alleged that the bank failed to disclose the significant risks associated with its work for 1MDB, a Malaysian sovereign wealth fund. The fund became the center of a global corruption investigation after billions of dollars were misappropriated.
Between 2012 and 2013, Goldman Sachs acted as the primary underwriter for three bond offerings that raised approximately $6.5 billion for 1MDB. The bank earned an estimated $600 million in fees from these transactions. Prosecutors and regulators later determined that roughly $4.5 billion of the raised funds were siphoned off by high-ranking officials and their associates, including Malaysian financier Jho Low.
The shareholder class action specifically targeted the period between December 22, 2016, and November 8, 2018. During this time, plaintiffs argued that Goldman’s public assertions regarding its risk management and compliance protocols were contradicted by its actual conduct in the 1MDB deals. The lawsuit claimed that when the full extent of the bank's role in the scandal became public, the resulting decline in share value caused significant financial losses for investors.
This agreement in principle follows a series of massive settlements Goldman Sachs has reached with global authorities over the 1MDB matter. In 2020, the bank agreed to a $2.9 billion settlement with the U.S. Department of Justice and other regulators, which included a deferred prosecution agreement for the parent company and a guilty plea from its Malaysian subsidiary. Additionally, Goldman reached a $3.9 billion settlement with the Malaysian government to resolve criminal and civil proceedings in that jurisdiction.
The 1MDB scandal remains one of the largest financial frauds in history, leading to the conviction of former Malaysian Prime Minister Najib Razak and the indictment of several former Goldman Sachs executives. The settlement reached on Wednesday represents a significant step toward resolving the remaining civil liabilities faced by the bank in the United States. If the court grants preliminary approval by the May 20 deadline, a notice period for class members will follow before a final fairness hearing is scheduled.