The DOJ is reportedly checking whether the US bank broke federal law by not sending an alert about a transaction in Malaysia, adding a further twist to controversy about the Asian country's state-run fund.

Controversy around Malaysia’s embattled state-run 1MDB continues following a news report saying that US law enforcement officials a trying to identify if Goldman Sachs has broken federal law for not sending an alert about a transaction in Malaysia.

The probe concerns $3 billion raised by Goldman Sachs through a bond issue for Malaysian state investor 1Malaysia Development Bhd, according to the Wall Street Journal, citing unnamed sources. Goldman Sachs is not accused of wrongdoing. It declined to comment when contacted by WealthBriefingAsia yesterday. The Department of Justice said it could neither confirm or deny any such investigation.

Separately, the Monetary Authority of Singapore told this publication in an emailed statement: “In response to media queries, MAS stated that no bank in Singapore received the US$3 billion wire transfer from Goldman Sachs in relation to the bond issuance for 1MDB.”

The WSJ said the crux of the matter is whether the bank complied with the Bank Secrecy Act, the main US anti-money laundering law.

The Malaysian story has already rocked the private banking sector; Singaporean regulators moved last month to remove a merchant banking licence of BSI Bank, a subsidiary of Switzerland-headquartered BSI, for “gross misconduct” and violations of AML controls. BSI, in its own statement on the matter, referred to "the investigations into 1MDB, arising from activities occurring between 2011 and April 2015". BSI said it has "co-operated fully with both FINMA and MAS". (To view this story, click here.)

1MDB, which is accused of letting prominent individuals such as Malaysian politicians siphon off funds for private use, denies wrongdoing.

The WSJ report on the Goldman Sachs matter said half of the proceeds from the sale, which were transferred by Goldman Sachs to a Swiss bank account controlled by 1MDB, disappeared with some ending up in the Malaysian prime minister’s bank account. The newspaper also cited bank transfer data it has seen.

Investigators reportedly think that Goldman Sachs may have had grounds to believe that the money was not used for its intended purpose.