Goldman Sachs reveals ties to Libya fund

LONDON: Goldman Sachs has admitted in court documents to having used small gifts, occasional travel and an internship to cement its ties with Libya’s sovereign wealth fund under Muammer Qaddafi, the Financial Times reported.
The details were in the investment bank’s defense to a lawsuit filed by the Libyan Investment Authority (LIA) in London in January, which accused Goldman Sachs of exploiting its position to make money on failed derivative trades.
The fund accused the investment bank of gaining the “trust and confidence” of its inexperienced managers before advising them to enter into $1 billion worth of trades (779 million under current rates) which subsequently lost their value, but earned the bank a $350 million profit, the FT reported.
According to details provided in January by the High Court, the fund claimed that senior bankers — including a former Goldman vice-president, Youssef Kabbaj — tried to influence LIA staff with small gifts and a trip to Morocco.
At that time, a Goldman spokeswoman called the claims “without merit” and said the bank would “defend them vigorously.”
In defense arguments filed last week, Goldman admitted that certain LIA employees had on occasion visited Morocco with Kabbaj but said the LIA had been aware of and consented to the accommodation and entertainment provided, the FT reported.
The Wall Street Journal reported on Thursday that US authorities were investigating the techniques used by Goldman Sachs in its dealings with LIA under the Libyan dictator.
Qaddafi was ousted from power and killed in 2011 in a NATO-backed uprising spawned by the “Arab Spring.”