Libya's sovereign wealth fund took Goldman Sachs to court in London on Monday to recover $1.2 billion from a series of derivatives trades made during Muammar Gaddafi’s regime.
The Libyan Investment Authority claims that its international inexperience and a relationship of trust with the bank was "exploited" by Goldman Sachs, which disputes the allegations.
The Wall Street bank allegedly made $350 million in up-front profits from the trades, although the deals were rendered worthless for the LIA when they matured in 2011.
The LIA is now seeking compensation, with the case expected to start early next year unless a settlement is reached beforehand.
The claim relates to deals made in 2008 under Gaddafi in the few years between the country opening up to Western investments and the dictator's bloody overthrow in 2011.
The LIA said in court documents seen by AFP that the Wall Street bank used its influence to "drive through a series of complex derivative investments which, whilst extremely profitable for GSI [Goldman Sachs International] were inherently unsuitable for a sovereign wealth fund like the LIA".
Lloyd Blankfein, Chairman & CEO, Goldman Sachs (AFP)
