Last Updated : GMT 22:09:15
Arab Today, arab today
Arab Today, arab today

Goldman Sachs legal battle

With Libya wealth fund opens in UK

Arab Today, arab today

Arab Today, arab today With Libya wealth fund opens in UK

Goldman Sachs headquarters in New York City
London - Arab Today

Goldman Sachs exploited inexperienced staff at Libya's sovereign wealth fund to clinch "inappropriate" deals which cost the fund $1.2 billion (1.5 billion euros), lawyers claimed at London's High Court Monday.

The high-profile trial promises a rare glimpse into the workings of the US investment bank and features allegations of the use of prostitutes and of shady dealings in 2008.

The Wall Street giant denies any wrongdoing, saying the Libyan Investment Authority (LIA) lost money due to the 2008 financial crash, not their close but controversial working relationship.

On the opening day of the hearing into LIA's claim, its lawyer Roger Masefield read out an internal message sent by Goldman Sachs partner Driss Ben-Brahim.

Ben-Brahim said the nascent fund, set up by Moamer Kadhafi's regime in 2006 to capitalise on Libya's oil wealth, was "very unsophisticated -- and anyone could 'rape them'," the court heard.

The LIA alleges that Goldman Sachs employee Youssef Kabbaj embedded himself in the fund, gained the trust of "young and impressionable staff" and sold it complex products that ended up losing the LIA over $1.2 billion.

These actions earned the bank over $220 million in profits, LIA lawyers claim.

Kabbaj built an especially close relationship with Haitem Zarti, younger brother of fund chairman Mustafa Zarti, securing him a coveted Goldman internship, Masefield told Judge Vivien Rose.

Kabbaj took Haitem Zarti on holidays to Morocco and to a conference in Dubai.

Here, "it appears from Goldman Sachs' disclosure that, while there, Mr Kabbaj arranged for two prostitutes to spend the evening with them at a cost of $600," LIA lawyers claimed.

It is then alleged that the bank rushed through a basket of deals of "staggering size" in 2008 without the LIA conducting due diligence tests or seeking independent advice.

- Abuse of trust? -

The bank had earlier sold the LIA complex derivative products tied to the share prices of Citigroup bank and French energy firm EDF.

The LIA, one of the world's wealthiest investors, claims it was tricked into believing it had gained strategic stakes in the companies.

But it says in reality it only held risky bets which became worthless when stock markets plunged following the collapse of Lehman Brothers bank in September 2008, wiping out the $1.2 billion outlay.

The situation became clear to Mustafa Zarti during a 2008 meeting with the bank, whereupon he threw Kabbaj out of the meeting, the court heard.

He later called Goldman Sachs a "bank of Mafiosi" and claimed it had "abused his trust", selling him risky products inappropriate for a state fund.

The claimant's legal team cited as evidence of their opinion of their financial knowledge an email sent by a Goldman Sachs vice-president criticising a presentation given to the LIA.

It said: "You just delivered a pitch on structured leveraged loans to someone who lives in the middle of the desert with his camels."

Goldman Sachs denies it exerted undue influence on the fund or abused its trust, arguing that the deals involved standard products common in the financial world.

In its submission to the court, it said: "The credit crisis and its impact on global markets turned out to be far more prolonged than the LIA and the great majority of market participants had anticipated.

"The LIA was the victim of an unforeseen financial depression, not of any wrongdoing."

Goldman partners including Andrea Vella, co-head of investment banking in Asia, are expected to give evidence in the eight week hearing, in which the LIA is seeking to recoup its losses.

Source: AFP

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today with libya wealth fund opens in uk Arab Today, arab today with libya wealth fund opens in uk


Arab Today, arab today
Arab Today, arab today Adidas Originals ‘reinterpreted’

GMT 14:52 2016 Thursday ,01 December

Adidas Originals ‘reinterpreted’
Arab Today, arab today At Milaidhoo Island, Maldives

GMT 08:42 2016 Wednesday ,07 December

At Milaidhoo Island, Maldives
Arab Today, arab today Paris's matchbox apartments

GMT 10:37 2016 Saturday ,24 September

Paris's matchbox apartments
Arab Today, arab today As West watches Aleppo slip away

GMT 08:15 2016 Saturday ,10 December

As West watches Aleppo slip away
Arab Today, arab today 'Rookie' Trump must fall into line

GMT 08:02 2016 Tuesday ,06 December

'Rookie' Trump must fall into line

GMT 10:39 2016 Saturday ,10 December

From ECB deadline reports

GMT 09:28 2016 Friday ,09 December

The Middle East must collaborate

GMT 09:30 2016 Thursday ,08 December

China exports snap losing streak

GMT 07:57 2016 Wednesday ,07 December

British PM joins Gulf summit

GMT 09:37 2016 Tuesday ,06 December

Asian stocks rebound

GMT 09:17 2016 Monday ,05 December

Euro sinks on Italy worries

GMT 09:46 2016 Saturday ,03 December

Saudi labour minister sacked

GMT 12:03 2016 Friday ,02 December

In Trump's victory lap, a warning
View News in Arabic - Business: أخبار الاقتصاد
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today The summer school raising aspirations

GMT 12:49 2016 Tuesday ,06 December

The summer school raising aspirations
Arab Today, arab today Ryan Gosling, Emma Stone immortalized

GMT 12:31 2016 Thursday ,08 December

Ryan Gosling, Emma Stone immortalized
Arab Today, arab today Australia's Rinehart, China group

GMT 10:02 2016 Friday ,09 December

Australia's Rinehart, China group
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Hyundai allows Saudi journalists

GMT 15:14 2016 Thursday ,01 December

Hyundai allows Saudi journalists
Arab Today, arab today Latest Infiniti QX to compete

GMT 13:16 2016 Saturday ,26 November

Latest Infiniti QX to compete
Arab Today, arab today Kirk Douglas at 100, still in love

GMT 12:19 2016 Thursday ,08 December

Kirk Douglas at 100, still in love
Arab Today, arab today Swiss unveil stratospheric solar plane

GMT 13:47 2016 Thursday ,08 December

Swiss unveil stratospheric solar plane

GMT 10:48 2016 Tuesday ,06 December

France bets on Bollywood

GMT 10:52 2016 Tuesday ,06 December

Vanessa Redgrave makes directing

GMT 04:15 2016 Thursday ,30 June

World's largest uncut diamond fails

GMT 11:39 2016 Tuesday ,06 December

Indonesia expands protection

GMT 15:59 2015 Wednesday ,27 May

Seoul elevates gardening to high art

GMT 12:39 2016 Saturday ,26 November

Skin patch could help kids

GMT 13:17 2016 Friday ,25 November

Ajman Tourism launches time capsule

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 14:08 2016 Saturday ,10 December

Samsung Galaxy A8 arrives in Saudi market

GMT 09:53 2016 Sunday ,15 May

OMEGA official timekeepers
Arab Today, arab today
Arab Today, arab today
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Powered and Developed by FilmMatters

Copyright © 2016 Arabtoday

Developed by FilmMatters

© 2016 Arabtoday

arabtoday arabtoday arabtoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabtoday, Arabtoday, Arabtoday