Dec. 17 (UPI) -- Malaysia filed criminal charges against Goldman Sachs Monday in connection with a scandal that could result in more than $3 billion in fines.
Malaysian authorities said Monday Goldman Sachs misled investors when it arranged $6.5 billion in bond sales from the 1Malaysia Development Berhad (1MDB), a state-owned investment fund, in 2012 and 2013.
Goldman is accused of misleading or making false statements in its circulars and other documents prepared for the 1MDB bond sale.
"Their fraud goes to the heart of our capital markets," Malaysian Attorney General Tommy Thomas said. "If no criminal proceedings are initiated against the accused, their undermining of our financial system and market integrity will go unpunished."
Goldman Sachs could face fines up to $2.7 billion plus another $600 million in fees, officials said. The investment bank blames the action on rogue employees and said it will "vigorously defend" itself.
"We believe these charges are misdirected," spokesman Edward Naylor said.
The bank, though, said it will cooperate with the investigation.
The controversy has already forced Malaysian Prime Minister Najib Razak out of office.