Libya’s $1bn hangover after Goldman Sachs bankers paid for “lavish trip” to Morocco with “heavy drinking and girls involved”

 
Tim Wallace
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The Libyan Investment Authority is suing Goldman Sachs (Source: Getty)
Goldman Sachs bankers took Libyan sovereign wealth fund bosses on a boozy weekend to Marrakesh – befriending them before selling them financial products the clients did not understand, the High Court heard yesterday.

Libyan Investment Authority (LIA) said it lost $1bn (£622m) on the deals from January to April 2008, and told the court it believes Goldman Sachs made around $350m.

It is suing Goldman, arguing it was misled by the bank.

Goldman Sachs is fighting the claims, arguing “the LIA’s ...executives included highly experienced banking professionals.”

Former Allen and Overy lawyer Catherine McDougall told the court LIA managers’ “knowledge was extremely limited,” so the staff thought they were buying shares, but if fact bought derivatives.

She told the court the LIA staff had been taken on a “lavish trip” to Morocco with “heavy drinking and girls involved,” paid for by Goldman.

Goldman denies the claims, saying “the disputed trades were not difficult to understand.” The bank said it wanted a long-term relationship and so it would make little sense to rip the LIA off.

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