Goldenberg

• The Goldenberg scandal in the early 1990s is Kenya’s largest documented gold fraud.
• The scheme involved Goldenberg International Limited, which pretended to export gold and diamonds, and in exchange received substantial subsidies from the government for “earning” foreign exchange.

What was the Goldenberg scandal?

• The scandal centred on two companies: Goldenberg International and Exchange Bank Limited.
• The Goldenberg scandal occurred at a time of severe economic austerity in Kenya in the early 1990s.
• Coincidentally, or otherwise, Goldenberg International applied to the Kenyan government in July 1990 for certain privileges that spoke directly to the economic needs of the country.
• Goldenberg managed to defraud the Kenyan state of between US$600 million and US$1.5 billion in subsidies.
• The 2003 Judicial Commission of Inquiry into the scandal estimated that Goldenberg pilfered a total of KSh158.3 billion (US$2.3 billion at the time).

What institutional gaps enabled the fraud?

• There’s inherently nothing wrong with these measures, which are intended to stimulate trade.
• But they were implemented in the context of a corrupt political system and became instruments of fraud.
• The difference between official and parallel exchange rates, and the depreciating Kenyan shilling, allowed Goldenberg to earn illegal returns on foreign exchange.
• No one ever went to jail for this grand fraud despite years of inquiry and the prosecution of some of the parties involved.

What was the cost to Kenya?

The government of Kenya received no benefit as there were no official export earnings from the sale of gold and diamonds. There are no reliable estimates as to the scandal’s effect on Kenyans to date, largely because the payments made and money siphoned couldn’t be easily accounted for.

What are the lessons learned?

• For instance, since 2019, trade in gold in Venezuela and Iran has increased drastically with Turkey despite US sanctions.
• Regulatory frameworks governing trade in gold are weaker than the ones governing the entry of US dollars into the global banking system.
• Both Kenya and Zimbabwe have had long reputations of being politically risky, mired in corruption and having unsound policies.

• This action is pending in the United States District Court for the Southern District of New York.
• NeoGenomics and certain of its executives are charged with failing to disclose material information during the Class Period, violating federal securities laws.
• On this news, shares of NeoGenomics fell $5.30 per share, or 29.8%.
• About Kahn Swick & Foti, LLC
  KSF, whose partners include former Louisiana Attorney General Charles C. Foti, Jr., is one of the nation’s premier boutique securities litigation law firms.

• This action is pending in the United States District Court for the Southern District of New York.
• If you wish to serve as a lead plaintiff in this class action, you must petition the Court by February 6, 2023.
• NeoGenomics and certain of its executives are charged with failing to disclose material information during the Class Period, violating federal securities laws.
• About Kahn Swick & Foti, LLC
  KSF, whose partners include former Louisiana Attorney General Charles C. Foti, Jr., is one of the nation’s premier boutique securities litigation law firms.

• Gibbs Law Group announces that it has filed the first and only class action lawsuit against NeoGenomics Inc. (NASDAQ: NEO) and certain of its officers and directors on behalf of investors who purchased NeoGenomics securities from February 27, 2020 through April 26, 2022, inclusive.
• The lawsuit seeks to recover losses on behalf of NeoGenomics investors under the federal securities laws.
• To join the NeoGenomics class action lawsuit or to speak privately with our legal team about your rights in this class action lawsuit, click here or contact us at 510-876-9368.
• To join the class action or discuss your legal rights in the NeoGenomics class action lawsuit , visit our website or contact our securities team directly at 510-876-9368.