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Malaysian prosecutors have filed criminal charges against Goldman Sachs, alleging the Wall Street investment bank committed “gross violations” of securities laws in its dealings with the country’s scandal-wracked state investment fund 1MDB.

The Malaysian attorney-general’s office said it would seek criminal fines worth more than $3bn and prison terms against those responsible. The charges accuse Goldman bankers of bribing Malaysian officials to secure involvement in the auction of $6.5bn in bonds for 1MDB in 2012 and 2013.

Tommy Thomas, Malaysia’s attorney-general, alleged in a statement that Goldman received $600m in fees for its role, a total that was “several times higher than the prevailing market rates and industry norms”.

Similar charges were filed by US prosecutors last month. Here’s our analysis of the impact of the scandal on Goldman. (FT)

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In the news

Bond drought
Not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month. If the drought persists, it would be the first month without a high-yield bond being priced in the market since November 2008. “This is clearly more than year-end jitters,” said one strategist interviewed by the FT. Shares in US retailers, meanwhile, are on course for their biggest quarterly sell-off since the financial crisis, while Wall St bonuses are looking paltry as 2018 ends. (FT)

Bringing back “laojiao”
Before its abolition in 2013, China’s gulag-style laojiaosystem of re-education through work forced millions of political dissidents to perform hard labour. Now it appears that the system is being resurrected as Beijing cracks down on ethnic minorities. Separately, the NYT has a must-read story on how McKinsey held a lavish retreat not far from where the Chinese government is imprisoning thousands of ethnic Uighurs. In fact, McKinsey’s involvement with the Chinese government goes much deeper. (FT, NYT)

A Saudi rebuke
Saudi Arabia hit out at the US Senate vote to end US military aid for the Riyadh-led war in Yemen and to blame the country’s crown prince for the murder of Jamal Khashoggi. Despite the hostilities, a ceasefire in Yemen was agreed between the Iranian-aligned Houthi group and the Saudi-backed government of Abd-Rabbu Mansour Hadi at the weekend. (BBC, Reuters)

Hungarians protest against ‘slavery’ law
Thousands of demonstrators took to the streets in Budapest for a fourth day of protests against legislation that critics say erodes workers’ rights and codifies government control over the judiciary. The protests are quickly becoming the most co-ordinated show of opposition to the manner in which nationalist prime minister Viktor Orban has centralised his power since taking office in 2010. (FT)

Climate change deal
After two weeks of often all-night negotiations, almost 200 nations reached a landmark deal on a set of rules that will govern the implementation of the Paris climate pact. From a corporate angle, the Bank of England is planning to include the impact of climate change in its UK bank stress tests as early as next year, while ExxonMobil became the latest fossil fuel group to face growing investor pressure to address global warming. (FT)

The day ahead

May comes back to parliament empty-handed
Another tough day lies ahead for British prime minister Theresa May. She has to report to parliament on progress made last week on her visit to the EU summit to improve the Brexit deal. But she appeared to achieve nothing. Senior members of her cabinet have been urging her to test different versions of the future relationship through votes in parliament. These could include a no-deal Brexit, Mrs May’s deal or a second referendum. (FT)

Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.

What we’re reading

Lunch with Holocaust survivor Charlotte Knobloch
The leader of Munich’s Jewish community discusses rebuilding Jewish life after the Holocaust, saying she felt people were never ashamed of the Nazis’ rise to power. “People would say: Oh, we missed you. How are you doing? . . . The boy who used to spit at me suddenly seemed delighted to see me again. He just said: ‘How much you have changed!’ As if I had been away on holiday.” (FT)

CREDIT: JAMES FERGUSON

SoftBank’s credibility problem
SoftBank’s market value is only about one-third of what it thinks its assets are worth, suggesting the market does not believe in its leader Masayoshi Son. SoftBank hopes to undercut hostility with one of the largest-ever initial public offerings: its mobile business. The FT’s Lex team is not so sure this will work. (FT)

On the cusp of control
Russian-born heiress Margarita Louis-Dreyfus has given a rare interview with the FT. Now the majority shareholder of Louis Dreyfus Company, Ms Louis-Dreyfus is set to cement her control over the 167-year-old storied group. And she is keen to separate fact from fiction. (FT)

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The anti-bribery Grinch that nixed corporate gifts
Christmas is a time of giving, but no longer it seems when it comes to expensive corporate presents. The practice of sending gifts to clients and suppliers is in decline due to strained budgets and anti-bribery regulations. Notebooks and reusable cups are replacing cases of wine, although the odd £6,000 Christmas hamper is still sneaking past the accounts department. (FT)

What I learnt from a year of reading only books by women
“These days, most of us are alert to the perils of unconscious bias in our professional lives,” writes Alice Fishburn. “But I hadn’t expected to find it so explicitly on my bookshelves.” (FT)

McKinsey and the job interview of the future
Pilita Clark takes a crack at a computer game McKinsey is using to hire its next generation of consultants and employees. Tasked with building a healthy coral reef, she says all she seemed to be creating was a tiny pile of corpses. (FT)

Video of the day

Fintech face-off: Big banks vs start-ups
Robert Armstrong debates with . . . Robert Armstrong about whether fintech is a threat to the big banks, or whether they will respond to the challenges from start-ups by copying them or buying them out. (FT)

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