Arab Today, arab today libya sues goldman over failed deals worth 1bn
Last Updated : GMT 03:03:12
Arab Today, arab today
Arab Today, arab today

Libya sues Goldman over failed deals worth $1bn

Arab Today, arab today

Arab Today, arab today Libya sues Goldman over failed deals worth $1bn

London - AFP

Libya's sovereign wealth fund is suing banking giant Goldman Sachs for "deliberately exploiting" its position to make $350 million profit on $1 billion worth of failed derivative trades, London's High Court announced Thursday. The Libyan Investment Authority (LIA), which was set up in 2006 to handle the country's oil revenues, accuses the investment bank of gaining the "trust and confidence" of its inexperienced managers, before advising them to enter into "inadequately documented" derivative trades into companies including Citigroup, EdF, Santander and ENI. The nine deals, totalling $1 billion, were entered into in early 2008 but turned sour during the financial crisis, according to details made available by the High Court on Thursday. The trades "lost substantially all of their value" during the crisis and expired worthless during in 2011, the fund alleges. Despite the losses, the fund claims that the bank still walked away with profits of $350 million (£212 million, 257 million euros). A spokeswoman for the bank called the claims "without merit" and said they would "defend them vigorously." The fund claims that senior bankers -- including Driss Ben-Brahim and Youssef Kabbaj -- tried to influence LIA staff with small gifts and a trip to Morocco. Kabbaj, chief of Goldman's Libyan operations, and Ben-Brahim, the bank's head of trading for emerging markets, "reassured the LIA they were one of Goldman's key strategic clients," according to the fund's suit, which was filed last week. "Goldman unconscionably took advantage of the LIA's weakness... and encouraged the LIA to enter into the disputed trades... in order that Goldman might earn... substantial profit margins," it continued. Managers of the $60 billion fund were apparently confused about what they were investing in due to their "extremely limited in-house financial expertise", and were exploited by "Goldman's considerable financial experience," added the submission.

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Arab Today, arab today libya sues goldman over failed deals worth 1bn Arab Today, arab today libya sues goldman over failed deals worth 1bn

 



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