Jonathan Stempel

NEW YORK (Reuters) – Goldman Sachs Group Inc (NYSE:), officers and directors settled for $79.5million to address shareholder claims that they were negligent in their oversight, which led to them being involved in the 1MDB looting scandal.

On Friday, a preliminary settlement in the shareholder derivative suit was filed at Manhattan federal court. It requires U.S. district Judge Vernon Broderick’s approval.

Goldman’s insurers paid $79.5million to the defendants. This money would be used to implement compliance and governance measures such as giving Goldman more control over its chief compliance officer or creating an anonymous hotline that allows employees to share their tips.

U.S.prosecutors claim that Goldman assisted 1MDB in bond sales of $6.5 billion, however, $4.5 billion was diverted through kickbacks and bribes to bankers and government officials.

The Fulton County Employees’ Retirement System, based in Atlanta, sought to have David Solomon (Goldman chief executive) and Lloyd Blankfein (predecessor) held accountable for the “conscious disregard” of their oversight obligations as Goldman failed “red flags of fraud.

In agreeing to settle, none of the defendants acknowledged wrongdoing nor liability. Maeve DuVally, a Goldman spokesperson declined to comment.

The bank has previously agreed to make payments of billions of US dollars to United States authorities and to other countries that have more than 1MDB. A three-year agreement was made with U.S. Department of Justice for deferred prosecution.

Roger Ng (ex-Goldman banker) was convicted of bribery, money laundering charges in Brooklyn, New York. He is accused of his involvement in the scandal.

Saxena White represented the shareholders and called the payout of $79.5 million “an outstanding recover for the company” as well as the second-largest derivative settlement by shareholders in federal courts that include New York.

They plan to collect fees equal to 25 percent of the settlement amount or $19.9million, as Goldman would.

This case involves Fulton County Employees’ Retirement System v Blankfein et al., U.S. District Court Southern District of New York. 19-01562.