Lawyer Monthly Magazine August 2020 Edition

7 AUG 2020 | WWW.LAWYER-MONTHLY.COM NEWS GOLDMAN SACHS AGREES $3.9 BILLION 1MDB SETTLEMENT WITH MALAYSIA The Wall Street giant has made a key step towards extricating itself from its greatest scandal. The deal, reached on 24 July, involves a payment of $2.5 billion cash payout by Goldman Sachs Group Inc. to the Malaysian government and a further guarantee that Goldman Sachs will return “at least $1.4 billion in proceeds from assets related to 1MDB seized by governmental authorities around the world,” according to a statement from the investment bank. In return, Malaysia will drop all criminal and regulatory proceedings against Goldman Sachs, including outstanding proceedings against its subsidiaries and its current and former directors. The settlement relates to Goldman Sachs’ alleged role in an international scandal involving the 1Malaysia Development Berhad, a state sovereign wealth fund and the investment bank’s client. Goldman Sachs arranged and underwrote bond sales for 1MDB totalling around $6 billion, and allegedly failed to act while $4.5 billion was stolen from the fund. Money siphoned from 1MDB flowed to a variety of causes, which allegedly included the purchasing of Van Gogh and Monet paintings and the financing of the Hollywood hit The Wolf of Wall Street. $731 million was also discovered in the bank account of Malaysia’s then prime minister, Najib Razak, who also served as 1MDB’s chairman. Malaysia filed charges against 17 Goldman Sachs employees last year, which the investment bank called “misdirected”. “This settlement represents Goldman’s acknowledgement of the misconduct of two of its former employees in the broader 1MDB fraudulent and corruption scheme,” said Malaysia’s finance ministry in a statement on the deal. Goldman Sachs has yet to resolve an ongoing investigation by the US Department of Justice related to the 1MDB scandal. NEW YORK CANCELS SEPTEMBER BAR EXAM Citing the ongoing threat of COVID-19, the New York state bar exam has been postponed with no alternative arrangements yet announced. Earlier this month, the New York Court of Appeals announced the Board of Law Examiners’ decision to cancel the upcoming bar examination, which was to be held on 9-10 September. “The Board arrived at this decision after careful consideration of current conditions and with a singular focus on the health and safety of all participants,” the Court wrote. “Unfortunately, the global pandemic presents a persisting threat in a growing number of states and therefore, at this juncture, an in-person exam is not yet a safe or practical option in New York.” The exam’s cancellation follows its earlier postponement from late July, when the licensing exam is typically given. On average, about 10,000 people sit for this exam each year, marking New York out as the single largest bar exam jurisdiction in the US. The Court’s statement did not announce any alternative arrangements for those preparing to take the bar exam. Other states including Michigan, Louisiana, Massachusetts, Nevada and Maryland have attempted to work around the COVID-19 pandemic by implementing an online test. Others, such as Washington, Oregon and Utah, have announced alternative measures to grant law graduates “diploma privileges” that will allow them to practise law without having taken the exam. However, the announcement added that the Chief Judge has assembled a Working Group to determine the next steps for the state bar exam. The group will be chaired by retired Court of Appeals Judge Howard A. Levine, and will be tasked with evaluating the current state of the bar exam and other proposed systems for assessing applicants. The group will aim to produce its recommendations by early August. According to Bloomberg, Scott Karson, president of the New York State Bar Association, remarked in a statement that “The class of 2020 has been dealt a difficult hand and many graduates are experiencing stress and strain over the uncertainty surrounding the bar exam, a grim job market, and staggering student debt,” adding that the NYSBA will “expeditiously examine the alternatives” for law school graduates seeking accreditation.