Goldman Sachs fights $1bn court battle against Libya's wealth fund

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Goldman Sachs fights $1bn court battle against Libya's wealth fund

Tim Wallace
4 JUNE 2016 • 7:30PM

Goldman Sachs is braced for a $1bn court battle this month, facing dramatic claims in the High Court that it took advantage of naïve leadership at the Libyan Investment Authority (LIA) to rip off the sovereign wealth fund.

The LIA claims that its former management, in the Gaddafi era, lacked any financial knowledge and so were taken advantage of by senior staff at Goldman Sachs, losing more than $1bn in a series of nine derivatives trades in 2008 which gave Goldman hundreds of millions of dollars in profit.

Goldman Sachs denies the claims. The case is a highly unusual one, as major investment institutions such as sovereign wealth funds are typically seen as highly sophisticated investors with the financial resources to hire lawyers and advisors, and so are legally held responsible for their own decisions.

In this case, however, the LIA claims its management at the time did not understand what they were doing, and trusted Goldman Sachs to give good advice – trust which, the LIA claims, was used to exercise “undue influence” over the LIA....

Read more:
http://www.telegraph.co.uk/business/2016/06/04/goldman-sachs-fights-1bn-court-battle-against-libyas-wealth-fund/