Goldman Sachs Chief Executive Officer David Solomon apologised on Wednesday to the Malaysian people for former banker Tim Leissner's role in the sovereign wealth fund 1MDB scandal, but said the bank had conducted due diligence before every transaction.

Goldman is being investigated by Malaysian authorities and the U.S. Department of Justice for its role as underwriter and arranger of three bond sales that raised 6.5 billion U.S. dollars for 1Malaysia Development Berhad.

U.S. prosecutors last year charged two former Goldman bankers for the theft of billions of dollars from 1Malaysia Development Berhad. Leissner, a former partner for Goldman Sachs in Asia, pleaded guilty to conspiracy to launder money and violate the Foreign Corrupt Practices Act.

"It's very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the prior government," Solomon said on conference call discussing the bank's fourth-quarter results.

Solomon said that Leissner denied the involvement of any of Goldman's intermediaries in transactions with 1MDB.

Roger Ng, the other charged former Goldman banker, was arrested in Malaysia at the request of U.S. authorities and is expected to be extradited, according to John Marzulli, a spokesman for the prosecution.

The U.S. Department of Justice has said that 4.5 billion U.S. dollars was misappropriated by high-level officials of the fund and their associates between 2009 and 2014.

Shares of the bank, which reported strong fourth-quarter results earlier in the day, have fallen over 25 percent in the last three months, after headlines about its involvement with the sovereign wealth fund emerged.

The Malaysian government said in December it was seeking up to 7.5 billion U.S. dollars in reparations from Goldman over its dealings with 1MDB.