Mobile  |  About us  |  Photos  |  Videos  |  Subscriptions  |  RSS Feeds  |  Today's Paper  |  Classifieds  |  Contact Us
The Daily Star
FRIDAY, 25 APR 2014
06:28 AM Beirut time
Weather    
Beirut
22 °C
Blom Index
BLOM
1,214.01down
Middle East
Follow this story Print RSS Feed ePaper share this
Libya sues Goldman over failed deals worth $1 billion
Agence France Presse
A Goldman Sachs sign is seen above the floor of the New York Stock Exchange shortly after the opening bell in the Manhattan borough of New York January 24, 2014.  (REUTERS/Lucas Jackson)
A Goldman Sachs sign is seen above the floor of the New York Stock Exchange shortly after the opening bell in the Manhattan borough of New York January 24, 2014. (REUTERS/Lucas Jackson)
A+ A-

LONDON: 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, 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 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.

A bank spokeswoman 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,” it added.

 
A version of this article appeared in the print edition of The Daily Star on February 01, 2014, on page 5.
Home Middle East
 
     
 
Libyan oil / Libya / Oil & Gas
Advertisement
Comments  

Your feedback is important to us!

We invite all our readers to share with us their views and comments about this article.

Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.

comments powered by Disqus
Story Summary
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 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 Thursday.

Despite the losses, the fund claims that the bank still walked away with profits of $350 million.
Related Articles
Bahrain’s Ahli United Bank considers sale or merger
Companies to manage $11B of Libya wealth
 
 
Staff compensation holding back Standard Chartered sale
 
 
Arab banks step in as Western rivals cut operations in region
Entities
Advertisement


Baabda 2014
Advertisement
Follow us on Facebook Follow us on Twitter Follow us on Linked In Follow us on Google+ Subscribe to our Live Feed
Multimedia
Images  
Pictures of the day
A selection of images from around the world- Thursday April 24, 2014
View all view all
Advertisement
Rami G. Khouri
Rami G. Khouri
Israel shows Zionism’s true colors
Michael Young
Michael Young
For Christians, blessed are the dividers
David Ignatius
David Ignatius
An Iran deal is close, but we’re not there yet
View all view all
Advertisement
cartoon
 
Click to View Articles
 
 
News
Business
Opinion
Sports
Culture
Technology
Entertainment
Privacy Policy | Anti-Spamming Policy | Disclaimer | Copyright Notice
© 2014 The Daily Star - All Rights Reserved - Designed and Developed By IDS