Dark pools are known for their lack of transparency— so naturally, a lot of suspicious activity takes place there.
Big institutional traders like to disguise their trades in them.
It allows them to cash in on enormous block orders from behind the general public’s eyes.
One such dark pool is Goldman Sachs’ Sigma X.
And I’ve been delving into it lately to see what the big institutional traders are doing.
Because by looking at the order flow, it’s possible to legally make a lot of money copying their moves— even if those moves are considered sinister to most.
It just so happens that Goldman recently got slapped with charges for a Foreign Corrupt Practices Act (FCPA) violation. Along with these charges came an agreement to pay over $2.9 billion.
The charge in question?
The 1 Malaysia Development Berhad scandal (1MDB scandal), a saga that just keeps giving… And by giving, I mean that the SEC and DOJ have been making it RAIN with charges.
This comes on top of charges for a certain high-ranking executive and a crook on the run with billions to help ease his fugitive lifestyle.
So what on earth happened?
$4.5B from the Philanthropic 1MDB Fund Financed a Party-Boy Lifestyle
Between 2009 to 2015, $4.5 billion was siphoned out of the 1Malaysia Development Berhad fund.
…. And yes, you read that correctly, $4.5 billion.
Goldman has been accused of assisting the McDaddy of all thieves with pulling off this scam…. And by assisting, I mean a certain connection, not a full-blown tin hat conspiracy.
The worst part is 1MDB was created by Malaysia to help boost its economy. It was a project meant to form global partnerships and improve the country for its citizens.
1MDB was not meant as a jackpot score for thieves.
But it seems to be exactly how it all played out.
There are several major players involved in this multi-billion-dollar heist. Oddly, enough celebrities have been sucked into the 1MDB black hole.
The one person who gained for their part is the now notorious fugitive, Jho Low.
The same man who dated Victoria Secret model Miranda Kerr— showering her in jewels, luxury, even gifting her a crystal piano…. All of which were evidently stolen.
She was far from the only celebrity Low was rubbing elbows with.
He buddied up to Leonardo DiCaprio joining in on his party-boy lifestyle. Even partying with Playboy Bunnies. Their friendship led to Low gifting the actor with a legit Picasso.
And as irony would have it Low helped finance Wolf of Wall Street. Too bad no one noticed that Low was the real wolf.
Everything was rumored to be funded with the stolen 1MDB money.
2 Goldman Execs Are Also Under Scrutiny
Low has been on the run now for a hot minute. Only allowing the U.S. to claw back $1 billion worth of his assets that included a $250 million mega yacht, a PJ, and a luxe hotel.
Low may have been the top dog but he was not the only crooked goon with his hand in the honey pot.
SEC and the DOJ came down on 2 of Goldman’s former Executives. Tim Leissner, Goldman Sachs former Southeast Asia Head, the same man married to Kimora Lee Simmons. And Ng Chong Hwa the former managing director and head of investment banking at Goldman.
Goldman is now stating the duo along with another employee conspired with Low. A scheme that paid over $1.6 billion in bribes to an insane number of government officials.
This handsome sum came from funds snuck from bond offerings underwritten by their employer…. And like typical crooks they skimmed off the top.
Goldman also admits that Low’s extensive connections helped the bribery scheme go down easy. It also ensured that Goldman was awarded the elite position on 3 bond transactions for 1MDB.
Talk about some dirty business.
Goldman received hella pay for its part with the estimate standing at $606 million in sexy fees and revenue. Another benefit was a huge leg up in its presence and status in Southeast Asia, a huge boost that was priceless.
Ole Tim personally received around $43 million for his part in bribery…. A role he admitted to and received an order to cough up a $43.7 million disgorgement.
But it’s Goldman Sachs that is bearing the pain of these crooks’ nasty habits. Currently, the firm is on an apology world tour. Paying more than $2.9 billion for its link to the bribing of Malaysian and Abu Dhabi officials.
This comes on top of the $2.5 billion Goldman paid to Malaysia and the $1.4 billion it promised them from the massive clawback taking place.
This story may not have turned out well for Goldman Sachs and its execs— but believe it or not, they get away with stuff like this all the time.
Which is why the easiest way for me to get even with them is actually copying their dark pools moves.
Check out this recent chalk talk I shared on how I hunt down trade ideas in the Dark Pools.