Former Goldman banker Roger Ng’s 1MDB trial is about to begin

Today, former banker Roger Ng is due to stand trial in a Brooklyn courtroom over allegations he encouraged the looting of the massive Malaysian state fund known as 1MDB. The legal proceedings will resurrect a scandal that saw $4 billion stolen from the Malaysian government and tarnished the reputation of Ng’s former employer, Goldman Sachs.

Ng reportedly introduced Goldman colleagues to Jho Low, the businessman accused of orchestrating what Ng’s own lawyers called “perhaps the biggest heist in the history of the world”. Prosecutors say Low, Ng and former star banker Tim Leissner conspired to pay $1 billion in bribes to government officials to win Goldman warrants for $6.5 billion bond issues for 1MDB. The money earmarked for the fund was then spent on a Beverly Hills hotel, a mega-yacht, a transparent grand piano, funding for “The Wolf of Wall Street” and more.

His former Goldman colleague is expected to be a key witness. The testimony of Leissner, who pleaded guilty in 2018 and agreed to forfeit up to $43.7 million in assets, is considered crucial to the prosecution. He could start testifying as early as this week. (Low is still at large and denies any wrongdoing.)

Ng says he has become a scapegoat. His lawyers will argue that Ng was not a key player in setting up the 1MDB bond deals and that their client was unaware that the money he received came from the misappropriated proceeds of those deals. They could also point to evidence that Leissner was a con man who tricked many people at Goldman.

It’s a reminder of a nadir in Goldman’s history. The bank’s Malaysian subsidiary pleaded guilty to conspiring to violate US anti-corruption laws, while its parent company reached a deferred prosecution agreement for a similar charge. Goldman has also clawed back or withheld millions of dollars in compensation from top executives, including former CEO Lloyd Blankfein and current chief David Solomon.

Markets tremble as tensions over Ukraine continue. Stock futures are down, volatility is up and oil is near $100 a barrel as traders fear the standoff between NATO and Russia could significantly disrupt Russian oil production and gas. Meanwhile, National Security Advisor Jake Sullivan has warned that Moscow may soon invade Ukraine despite diplomatic efforts to defuse the crisis.

Canadian authorities reopen a bridge blocked by protesting truckers. The Ambassador Bridge, a major route for shipping cars and auto parts between Canada and the United States, was reclaimed yesterday amid anti-government protests. But the protests around Parliament in Ottawa have entered their third week, with no end in sight.

Lockheed Martin drops $4.4 billion deal over antitrust opposition. The defense contractor withdrew its takeover bid for Aerojet Rocketdyne after the FTC filed a lawsuit to block the deal. Tighter antitrust scrutiny of mergers is making investors more skeptical about closing deals.

President Biden says it’s too early to lift indoor mask mandates. In an interview with NBC, Biden said scrapping mask rules was “probably premature,” though he understands Americans’ frustrations with pandemic restrictions. His comments came after a number of Democratic governors relaxed those requirements, citing a drop in the number of cases.

Peter Thiel becomes a Republican kingmaker again. After being largely absent from the 2020 election, the Silicon Valley billionaire has given more than $20 million so far this election cycle, tying him with Citadel’s Ken Griffin as the biggest GOP donor. . The difference: Thiel’s donations are largely aimed at far-right candidates loyal to former President Donald Trump and eager to overthrow the Republican establishment.

Perhaps the hottest story in tech last week was the arrest of married couple Ilya Lichtenstein and Heather Morgan on charges of conspiring to launder billions of stolen Bitcoins. (Netflix has already commissioned a documentary about the case.) The Times delved into how the pair were captured.

A complex web of accounts behind a goofy facade. Until their arrest, Lichtenstein was known as a tech entrepreneur, while Morgan contributed to Forbes and made rap videos under the name Razzlekhan. But federal prosecutors allege she and Lichtenstein were “highly sophisticated criminals,” with hundreds of millions of stolen crypto hidden in more than a dozen accounts. Lichtenstein and Morgan also had access to several fraudulent identities purchased on the darknet and had established financial accounts in Russia and Ukraine, according to the government.

Money Sequel:

  • Five months after hackers stole money from the Bitfinex exchange in 2016, some of the crypto was moved in small, complex transactions to accounts the couple controlled.

  • Federal agents eventually tracked down those accounts and executed a search warrant at their Manhattan apartment last month. They found over $40,000 in cash and over 50 electronic devices, many of which were at least partially encrypted.

  • Then there was the cat. Officers allowed Morgan to retrieve her cat – an opportunity she used to try and lock out one of her cellphones, which prosecutors said was meant to hamper the investigation.

A lawyer for the couple, Anirudh Bansal, wrote in court documents that the government’s case is weak and rests on “unsubstantiated conclusive leaps”.


— Jacqueline Newman, a New York divorce attorney, explains how cryptocurrency is increasingly being used to hiding assets in case of divorce, giving rise to a cottage industry of forensic investigators who hunt down the Bitcoin treasures of future spouses. (Yes, we know it’s Valentine’s Day.)


Last night’s game thrilled football fans, as the LA Rams’ risky gamble on their roster paid off in a 23-20 win over the Cincinnati Bengals. But equally noteworthy, of course, were the expensive ads — NBC charged up to $7 million for a 30-second slot — and what they can tell us about this post-pandemic moment:

Crypto and sports betting took center stage. The game had previously been dubbed the “Crypto Bowl” for the large number of cryptocurrency advertisers who had booked slots: Coinbase ran an ad that only had a QR code (to help people open accounts), while FTX paid comedian Larry David to be, well, Larry David. Betting apps have also had a strong presence as companies like Caesar’s Sportsbook have seized on the legalization of online sports betting.

Companies anticipate a return to normal. Booking.com, Expedia and Turkish Airlines have all booked advertising slots, taking advantage of renewed interest in travel as coronavirus restrictions are lifted. Others hoping to play on any decline from the pandemic were online used car seller Carvana and razor maker Gillette. (As a reminder that the pandemic is not over, at-home Covid test maker Cue Health also bought an ad.)

Welcome to the Metaverse? Meta, Facebook’s parent company, ran an ad featuring two old pals reuniting in the virtual world, while Miller Lite ran its in-game ad. in the metaverse (since in-game advertising is prohibited). Salesforce ostensibly ran an ad featuring Matthew McConaughey urging people to ignore virtual realms in favor of real life.

Offers

  • Cisco has offered more than $20 billion to buy data analytics software maker Splunk, although talks are not currently active. (NYT)

  • Australian casino operator Crown Resorts has accepted a $6.4 billion takeover bid from Blackstone, ending a nearly year-long acquisition effort. (FT)

  • Two influential shareholder advisors have recommended that investors reject Zendesk’s takeover bid for parent company SurveyMonkey. (Reuters)

  • Trading in SPAC-linked warrants suggests investors don’t believe these blank check funds will find attractive redemption targets — or none. (Bloomberg)

  • Religion of Sports, the media company co-founded by former NFL stars Tom Brady and Michael Strahan, is reportedly seeking $50 million in new funding. (information)

Politics

  • “Selling Trump: A profitable post-presidency like no other” (NYT)

  • The Justice Department is investigating Raytheon on charges of colluding with suppliers to limit hiring. (Bloomberg)

  • The United States has temporarily halted imports of Mexican avocados after a US health inspector received a threatening phone call. (initiated)

  • Switzerland has approved a ban on tobacco advertisements in public spaces. (NYT)

  • Kirin, the Japanese brewer, is pulling out of Myanmar, a year after the country’s military overthrew its government in a coup. (Reuters)

The best of the rest

  • New court filings in an age discrimination lawsuit against IBM appear to show executives discussing plans to phase out older employees, decried as “dinobabies”. (NYT)

  • Meet Jaz Brisack, the Rhodes Scholar who helped organize other baristas at a Starbucks in Buffalo. (Wapo)

  • Business has boomed for Kroger, but a number of its employees say they have been homeless or dependent on food stamps and food banks due to precarious part-time work schedules. (NYT)

  • Elon Musk mocked an order from US authorities asking Tesla to disable a feature that lets its cars play sounds through an external speaker: ‘Fun police made us do it (sigh)’ (Bloomberg)

  • Ivan Reitman, the director of ‘Ghostbusters’ and ‘National Lampoon’s Animal House’, died on Saturday. He was 75 years old. (NYT)

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