The FCA and PRA have hit Goldman Sachs International (GSI) with a fine of £96.6m for management failings in dealing with allegations of bribery and staff misconduct.

The regulators said its mishandling of concerns allowed “severe misconduct” to go unaddressed.

The failures relate to 1Malaysia Development Berhad (1MDB) and London-based GSI’s role in three fund raising transactions for 1MDB.

The FCA and PRA fines are part of a US$2.9 billion (£2.2bn) “globally coordinated resolution” reached with The Goldman Sachs Group Inc and its subsidiaries.

1MDB is a Malaysian state-owned development company that has been at the centre of billion-dollar embezzlement allegations.

GSI underwrote, purchased and arranged three bond transactions for 1MDB in 2012 and 2013 that raised a total of US$6.5 billion (£5bn) for 1MDB. The 1MDB transactions were approved by global GSG committees that GSI participated in, and were booked to GSI. 

The 1MDB transactions involved clients and counterparties in jurisdictions with higher financial crime risk.

GSI was aware of the risk of involvement of a third party who was subject to serious concerns but failed to assess and manage risk to the standard that was required given the high risk profile of the 1MDB transactions, the FCA said.

GSI failed to assess risk factors on a sufficiently holistic basis and failed to address allegations of bribery in 2013. It also failed to manage allegations of misconduct in connection with 1MDB in 2015.

Mark Steward, FCA executive director of enforcement and market oversight, said: “GSI’s failure to take appropriate action in this case shows that it did not take this responsibility seriously.

“When confronted with allegations of bribery and staff misconduct, the firm’s mishandling allowed severe misconduct to go unaddressed. There is no amnesty for firms that tackle financial crime poorly and the size of GSI’s fine reflects that.”