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(CNN Business) —  

Goldman Sachs could be in big trouble for its involvement in a Malaysian investment fund scandal, and investors are getting antsy.

The Federal Reserve is stepping up its probe of Goldman Sachs’ compliance systems, according to Bloomberg.

Two former Goldman Sachs executives allegedly bribed foreign officials and helped launder money through the Malaysian sovereign wealth fund 1Malaysia Development Berhad, the US Justice Department alleged in indictments a month ago. One of them has pleaded guilty.

In recent weeks, representatives from Goldman Sachs met with the Fed and defended the bank’s internal controls, according to Bloomberg’s report Friday. Goldman would not comment on the report and a spokesperson for the Fed would not confirm the investigation.

“It is the Federal Reserve’s policy not to confirm or deny the existence of investigations. We refer criminal violations to the Department of Justice as necessary,” the Fed spokesperson said. The Justice Department declined to comment.

But Goldman (GS) shares closed down 2% on the day, and have lost 16% of their value since its involvement in the scandal was first reported by the Wall Street Journal on November 1. Bank of America downgraded Goldman Sachs’ stock from a buy to neutral rating Friday.

If Goldman was involved — or even if employees were able to short-circuit compliance systems -— the company could be subject to large fines. It could also lose business with other sovereign funds concerned about the taint of the scandal.

Goldman underwrote more than $6 billion in bonds issued by 1MDB in 2012 and 2013, making about $600 million in fees and revenue for that work, according court filings.

The Fed does not have power to bring criminal cases itself but it can take civil action against financial firms and individuals, including barring individuals from working in banking.

CNN Business’ Donna Borak contributed to this report