Goldman Sachs Group Inc. is in talks with the U.S. government to pay a multibillion-dollar fine, admit guilt and agree to ongoing oversight of its compliance procedures in order to resolve a criminal investigation into its role in a Malaysian corruption scandal.

Goldman and the Justice Department have largely agreed on a fine of just under $2 billion to settle allegations that the Wall Street firm ignored red flags while billions of dollars were looted from its client, a Malaysian government fund known as 1MDB, people familiar…

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