NEW YORK — Goldman Sachs has agreed to settle a class-action lawsuit accusing the Wall Street bank of defrauding shareholders about its work for 1MDB, a Malaysian sovereign wealth fund that became embroiled in a corruption scandal.

In a letter filed on Wednesday (April 22) in Manhattan federal court, Goldman and the shareholders said they reached an agreement-in-principle to settle, and plan to submit a settlement for preliminary approval by May 20.

Goldman declined to comment. 

Lawyers for shareholders led by the Swedish pension fund Sjunde AP-Fonden did not immediately respond to requests for comment. Terms were not disclosed.

Former Malaysian Prime Minister Najib Razak set up 1MDB to promote economic development, with help from Malaysian financier Jho Low, who is now a fugitive.

US and Malaysian authorities have said US$4.5 billion (S$5.7 billion) was siphoned away from 1MDB, with some diverted to offshore bank accounts and shell companies linked to Low.

Goldman helped 1MDB sell US$6.5 billion of bonds, and collected an estimated US$600 million of fees.

Shareholders accused the bank of lying about its role in the fraud while repeatedly touting its supposedly robust risk management.