Malaysia drops 1MDB charges against Goldman Sachs

Malaysia has dropped criminal charges against Goldman Sachs over its role in the 1MDB scandal, a lawyer for the bank said Friday.

Billions of dollars were looted from sovereign wealth fund 1Malaysia Development Berhad in a fraud that involved former prime minister Najib Razak and his cronies that spanned the globe.

The money was used to buy everything from expensive artwork to real estate and a massive luxury superyacht. Goldman's role came under scrutiny over bond issues totalling $ 6.5 billion it helped arrange for the investment vehicle, with Malaysia claiming large amounts were misappropriated during the process.

Authorities previously pursued all those involved in the scandal and filed charges against the Wall Street titan but state news agency Bernama reported that prosecutors told a Kuala Lumpur court they no longer intended to pursue them.

Hisyam Teh, a lawyer for the bank, confirmed to AFP that acquittal orders were granted. Goldman last month paid Malaysia $2.5 billion as part of a settlement over its role in the scandal, with a guarantee that at least $1.4 billion in assets acquired with misappropriated funds would be recovered.

Prime Minister Muhyiddin Yassin said Malaysia would receive a total of $4.5 billion, together with 1MDB-linked funds already handed back from the United States.

Najib, who was unseated in 2018 polls in part due to public anger over the scandal, was jailed for 12 years in July after the first of several trials linked to 1MDB. He remains free on bail while he appeals.

Asian markets fell deep into negative territory Friday following painfully deep losses on Wall Street, where the tech sector finally succumbed to profit-taking after months of mind-boggling gains.

All three main indexes in New York suffered hefty selling but the tech-heavy Nasdaq led the way with global titans such as Apple, Microsoft, Amazon and Facebook among the worst hit.

And the red ink flooded into Asia Friday, with tech firms again the whipping boys. Tokyo, Hong Kong, Seoul, Singapore, Mumbai, Jakarta and Wellington all sank more than one percent, while Sydney dropped more than three percent. Shanghai and Taipei were both off 0.9 percent off. London, Paris and Frankfurt were also down at the open.

The drop had been expected after the Nasdaq climbed around 80 percent from its March trough, with analysts warning that valuations were growing increasingly out of sync with economic realities-Tesla has risen nearly 500 percent in the time and Apple more than 120 percent.

The rally had been propelled by expectations for strong earnings growth next year following fiscal and monetary stimulus measures and as the world economy recovers from the virus crisis.

"Given the market's seemingly relentless climb higher on the back of the mega-cap tech names, it should be no surprise that a pullback was in the offing as the market became increasingly extended and

Quincy Krosby, at

Financial Inc, said.

This could be "an overbought market that is burning off froth, following end-of-the-month portfolio adjustments as managers needed to catch up". Observers said September has historically been a bad month for stocks and that while recent economic data had not been brilliant, it was not bad enough to spark such a sell-off.

And with central banks promising to back up financial markets for the foreseeable future, there are no expectations of a calamitous drop such as that seen in March or the tech bubble crisis two decades ago. overbought,"

Prudential