In this file photo, the headquarters of Goldman Sachs is pictured on April 17, 2019 in New York City. (JOHANNES EISELE / AFP)

KUALA LUMPUR/WASHINGTON - Goldman Sachs Group Inc on Thursday reached a deal to settle a probe into the bank's role in Malaysia's 1MDB corruption scandal, which included total penalties of US$2.9 billion.

On Thursday, Hong Kong's markets watchdog also fined Goldman's Asia unit US$350 million for serious lapses and deficiencies in its management controls that contributed to the misappropriation of US$2.6 billion in funds it helped raise for 1MDB

The bank was investigated for its role in raising US$6.5 billion in three bond sales between 2012 and 2013 for the 1Malaysia Development Berhad (1MDB) state fund.

What is 1MDB?

1MDB is a state fund launched in 2009 by former Malaysian prime minister Najib Razak to promote economic development.

How did billions go missing?

1MDB raised billions of dollars in bonds, ostensibly for investment projects and joint ventures between 2009 and 2013.

Malaysian and US authorities say US$4.5 billion, including some of the money Goldman helped raise, was stolen from 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials of the fund, Najib and others.

The siphoned funds were used to buy luxury assets and real estate, including hotels, a private jet, art by Picasso and Monet, and to finance Hollywood films, US lawsuits said.

ALSO READ: Goldman, Malaysia 'sign final deal' on 1MDB settlement

The US Department of Justice has sought to recover about US$2.1 billion in assets linked to diverted 1MDB funds - the largest ever asset recovery action brought by the agency.

How is Goldman Sachs involved?

Goldman has been investigated by regulators in at least 14 countries for its role in underwriting the 1MDB bond issues.

The work earned the bank US$600 million in fees and led to large bonuses for some of its executives, officials have said, although the bank has disputed that figure.

The Justice Department said on Thursday that Goldman violated the US Foreign Corrupt Practices Act, which bans US companies from paying foreign government officials for help in getting or keeping business. Malaysian prosecutors also said the bank misled investors over the bond sales.

ALSO READ: Goldman 'to pay more than US$2b in DOJ's 1MDB probe'

Goldman has in the past said that certain members of the former Malaysian government and 1MDB officials lied to it about how proceeds from the bond sales would be used.

On Thursday, Goldman's Malaysian unit pleaded guilty to violating US foreign bribery rules.

How much will Goldman pay?

In this May 14, 2015 file photo, construction workers chat in front of a billboard for state investment fund 1 Malaysia Development Berhad (1MDB) at the fund's flagship Tun Razak Exchange development in Kuala Lumpur, Malaysia. (JOSHUA PAUL / AP)

Goldman will pay a US$2.3 billion fine to the Justice Department and other regulators, and a further US$600 million in disgorgement of ill-gotten gains to settle the US probe and avoid a criminal conviction at the group level.

This is in addition to the US$3.9 billion that Goldman has agreed to pay Malaysia in exchange for dropping all criminal charges against the bank.

On Thursday, Hong Kong's markets watchdog also fined Goldman's Asia unit US$350 million for serious lapses and deficiencies in its management controls that contributed to the misappropriation of US$2.6 billion in funds it helped raise for 1MDB.

READ MORE: HK fines Goldman Sachs record US$350m over 1MDB failings

Are there any other cases against Goldman?

The Justice Department has filed criminal charges against two former Goldman bankers tied to the scandal, Tim Leissner and Roger Ng.

Leissner plead guilty to the charges last year, while Ng's case is pending in a New York court. Ng is expected to face separate charges in Malaysia after his US trial concludes.

This week, Abu Dhabi's International Petroleum Investment Co (IPIC) dropped a lawsuit against Goldman to recover losses suffered from the bank's dealings with 1MDB.

The lawsuit alleged that Goldman conspired with unidentified people from Malaysia to bribe two former IPIC executives to further their business at its expense.

How much more is being sought?

The Justice Department has recovered or assisted Malaysia in recovering nearly US$1.1 billion in 1MDB-linked assets.

Malaysian authorities say at least US$4.3 billion more are still unaccounted for.

Who else has been implicated?

After losing an election in 2018, Najib has been charged with 42 criminal offenses in Malaysia, mostly linked to losses at 1MDB and other state entities.

In July, he was found guilty of corruption and money laundering for illegally receiving US$10 million from a former 1MDB unit and sentenced to 12 years in prison. Najib denies wrongdoing and has filed an appeal.

READ MORE: Malaysia court rejects Najib's bid to drop 1MDB audit charges

Elliott Broidy, a former fund-raiser for US President Donald Trump, pleaded guilty this week to a charge that he illegally lobbied Trump to drop an investigation into 1MDB.

Malaysian and US authorities have also filed charges against Malaysian financier Jho Low for his alleged central role in the 1MDB fraud. Low has denied wrongdoing and his whereabouts is unknown.