The Wall Street Journal reports that regulators had been warning that the deals for the controversial Malaysian government investment fund could have put the firm’s reputation at risk.

Quoting “people familiar with the matter’, the report said that by early 2104, The Federal Reserve, Goldman’s main US regulator, had been scrutinising the bond deals.

Regulators had questioned Goldman on “why 1MDB had continued to sell bonds despite holding ample cash”.

“Fed officials were also critical of Goldman’s vetting of the 1MDB deals, noting they had posed reputational risk. Fed officials have continued to monitor Goldman’s role in the Malaysia scandal, the people said.”

The latest revelations by the WSJ put 1MDB further in the spotlight.

The report provides more details about the alleged actions of Goldman’s former Southeast Asia head, Tim Leissner, who handled transactions for 1MDB.

It said Leissner was suspended from the firm for writing a letter vouching for Jho Low, the financier with ties to 1MDB. Leissner was suspended and later quit early this year after a review of his emails found he had allegedly written an unauthorised reference letter on behalf of Low.

“The fact that Mr. Leissner wrote a letter of reference to another financial institution for someone involved in 1MDB puts the firm deeper into the controversy surrounding the fund, lawyers say.”

Leissner is cooperating with US investigators on the probe into the bonds and 1MDB. However, neither he nor Goldman nor 1MDB have been accused of wrongdoing.

Goldman Sachs was the main banker to 1MDB, advising on three acquisitions and arranging the sale of three bonds valued at a total of US$6.5 billion, that brought in US$650 million for the firm. Leissner helped counsel 1MDB from its inception.

Investigators in at least six countries and Malaysia are probing 1MDB. US investigators are trying to determine whether Goldman misled investors who bought the 1MDB bonds, the report said.