JPMorgan Chase & Co, Deutsche Bank and Wells Fargo & Co have been asked by US authorities to retain and turn over records that may be related to improper transfers from an embattled Malaysian state fund, according to people familiar with the matter.
The banks aren't targets of the investigation and haven't been accused by authorities of wrongdoing. As some of the biggest conduits of the global financial system, they join other institutions that have said they're working with US officials examining moneyflows connected with 1Malaysia Development Berhad, known as 1MDB.
Goldman Sachs Group, which underwrote $6.5 billion in bond deals for 1MDB, is cooperating with Justice Department efforts to gather information, people familiar with the matter have said, adding there's no indication Goldman engaged in any wrongdoing. The bank declined to comment.
BSI SA, a Swiss private bank whose Singapore unit handled accounts for 1MDB and related entities, has also said it's cooperating with international regulators. BSI Chief Executive Stefano Coduri told investors on Thursday that in the context of issues surrounding 1MDB, the bank had exited its Malaysia business. He declined to comment further, saying "there are official investigations".
JPMorgan, Deutsche Bank and Wells Fargo facilitated transfers for 1MDB and related entities, according to the people familiar with the matter. Representatives for the banks declined to comment.
One bank received an instruction from the Justice Department not to destroy related documents dating back to 2009, the year 1MDB was created, according to a person familiar with the matter, who asked not to be identified because the information is confidential.
Deutsche Bank Malaysia and JPMorgan's involvement with 1MDB can be traced back to 2009 when they facilitated fund transfers for the company, according to the person familiar with the matter. Deutsche was also hired as one of the advisers for an initial public offering of 1MDB's power assets in mid-2014, which never materialised because of an unfavorable market. It also gave a $975 million loan to the company two years ago and 1MDB settled it in 2015.
Authorities from around the world - including in the US, Luxembourg, Switzerland and Singapore - are trying to piece together evidence to determine if some of the billions of dollars that 1MDB raised since 2009 were siphoned out of its coffers and into the personal accounts of politically connected individuals.
The fund, under the direction of Malaysian Prime Minister Najib Razak, has been criticised by Najib's political opponents for ballooning debt levels, a near-miss on a loan payment and accusations of financial mismanagement, prompting former premier and political rival Mahathir Mohamad to call for his resignation.
