Libya Loses $1.2bn Goldman Sachs Court Case

Libya’s sovereign wealth fund, the Libyan Investment Authority (LIA), has lost a two-and-a-half year battle for compensation from investment bank Goldman Sachs.

The UK High Court found in favor of Goldman on 14 October at the conclusion of a case that began in June having originally been filed in 2014 (MEES 2 September). The LIA claimed compensation of $1.2bn from Goldman Sachs over allegations relating to nine trades executed for the fund in the first four months of 2008 in which the bank earned more than $200mn but the LIA lost the bulk of its investment.

The LIA alleged that Goldman led it to make derivative transactions that it did not understand and that in an effort to win business from the fund Goldman held business meetings on yachts, paid for prostitutes, five-star hotels and private jets, and gave an internship to Haitem Zarti, younger brother of former LIA deputy executive director Mustafa Zarti. The judge said in her ruling that although the disputed trades may have been regarded as unsuitable for a sovereign wealth fund, that did not distinguish them from other LIA investments around the same time. She concluded that the LIA had greatly exaggerated the degree to which its staff did not understand what they were doing, concluding Mr Zarti was not unduly influenced by the internship given to his brother. (CONTINUED - 302 WORDS)