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Goldman to settle 1MBD scandal in Malaysia for $3.9-B

US investment bank Goldman Sachs will pay $3.9 billion to settle Malaysia's criminal probe over its role in the multibillion-dollar 1Malaysia Development Bhd (1MDB) scandal.

The deal consists of Goldman's $2.5 billion cash payout and a return of at least $1.4 billion in proceeds linked to 1MDB's assets.

Goldman Sachs said it is pleased to have reached an agreement in principle with the Malaysian government to resolve outstanding charges and claims against it.

According to Steven Chubak, an analyst at New York-based Wolfe Research, Goldman Sachs' move puts it closer to removing a predicament for investors.

There's also the added comfort that the total settlement amount should be manageable.

In turn, Malaysia will drop all criminal charges against Goldman Sachs, which pleaded not guilty and denied any wrongdoing.

Goldman Sachs shares rose 0.68 percent in New York on the Malaysia news, which signals that the US Department of Justice could be close to settling closing a similar probe.

Chubak noted that while it remains to see how the deal impacts negotiations with the US regulators, some relief could be extended to Goldman based on DOJ guidance to avoid 'piling on.'

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