As the legal scrutiny facing the infamous "Vampire Squid" intensifies (and the bank's shares languish at two-year lows), slowly but surely, more details about the compliance shortcuts and - in some cases, outright negligence - countenanced by Goldman's most senior employees during the bank's pursuit of the 1MDB bond offerings that have landed Goldman at the center of one of the biggest financial fraud scandals in history are slowly dribbling out.

And in its latest expose, the Wall Street Journal, which helped expose the scandal back in 2015 with a series of groundbreaking reports connecting money in a bank account controlled by former Malaysian Prime Minister Najib Razak to the bankrupt fund, has published more details about how Goldman partners - who have traditionally been given wide latitude to operate without restraint - enabled the bank's top bankers in Southeast Asia to work out a deal where Goldman would act as both financier and advisor for the fund, ignoring concerns about corruption raised by the bank's compliance committee.

David Solomon

The first allowances were reportedly made during a meeting of senior partners in Hong Kong in 2012 where they vetted the deal. Among the concerns highlighted were "media scrutiny" due to 1MDB's lack of a track record and the potential for - get this - corruption.

Goldman Sachs Group Inc.'s push for Asian business and lax oversight of partners led the bank to dismiss warning signs in its dealings with a corrupt Malaysian investment fund, internal documents and interviews with people involved in the transactions show. When the fund, 1Malaysia Development Bhd., first sought Goldman’s help raising money, the bond deal came before a committee of senior bankers in Hong Kong in 2012 for a key round of vetting. Among the concerns sketched out in the meeting’s agenda: “potential media and political scrutiny,” Goldman’s unusual role as both financier and adviser, the colossal profit earned on what should have been a modest transaction—and how much of that haul would need to be disclosed. Not up for discussion: the young fund’s scant track record. The deal happened anyway. It has ensnared Goldman in one of the largest financial frauds in history and darkened the early days of its new chief executive, David Solomon.

All of this cuts against Goldman's argument that a handful of "rogue" employees misled the bank into pursuing the extremely profitable deal to help enrich themselves. Tim Leissner, the former Goldman partner who organized the 1MDB deal, has admitted to stealing $200 million from 1MDB to bribe government officials to ensure that Goldman won the fund's business. But details reported by WSJ reveal that Leissner was abetted by the bank's senior partners, who endorsed Leissner's relentless pursuit of the deal as a crucial win for the bank, which worried that it was falling behind in Asia.

Andrea Vella, another Goldman partner who has been placed 'on leave' by the bank, is also in the crosshairs of the DOJ over suspicions that he was aware of the potential for corruption inside 1MDB, but continued to help Leissner circumvent Goldman's internal controls.

A second Goldman partner, Andrea Vella, led the structuring of the 1MDB deals and was put on leave after Mr. Leissner’s guilty plea. Prosecutors allege he knew bribes were being paid and helped Mr. Leissner circumvent Goldman’s controls. He hasn’t been charged with a crime and his attorney disputed the allegations.

A committee of partners tipped off Leissner about issues that compliance was planning to raise about the deal. Correspondence from one compliance official revealed that the bank could overlook concerns surrounding disgraced Malaysian financier Jho Low's involvement in another deal (Low is a fugitive from justice after being charged by Malaysian and US prosecutors with masterminding the fraud, and is believed to be hiding in China) so long as Low played "a minor role."

Gaps in Goldman’s compliance systems and a postcrisis push into emerging markets put Goldman on a collision course with 1MDB, according to dozens of interviews and a review of government and internal Goldman documents. In Asia, some members of a committee designed to keep Goldman out of dodgy deals tipped off Mr. Leissner and others about questions that were likely to come up, people familiar with the matter said. Mr. Low was rejected for a bank account in 2011 because compliance officials couldn’t verify the source of his wealth. Yet when Goldman bankers pursued deals involving Mr. Low, compliance officials offered mild protests, but not roadblocks. "Jho Low’s appearance is not welcome," one compliance officer wrote to a banker in 2013 when Mr. Low teamed up with a Goldman client to buy a Houston-based oil company. "But if he is in a very minor role…then we may be able to live with it." That deal, a takeover of Coastal Energy brokered by Goldman, is being investigated by U.S. prosecutors.

Malaysia is seeking nearly $3 billion in fines (far more than the $600 million profit Goldman reaped on the deal), and the alleged crimes carry penalties of up to 10 years in prison and fines of $240,000, according to Reuters. But even larger than the monetary costs, the prospect of the bank being tarred with criminal convictions - and the prospect of even more of its valued sovereign wealth fund clients departing for other banks - could have lasting ramifications for the bank.

And rightfully so.