Goldman Sachs accused of making $350m on 'worthless trades'

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The Libyan Investment Authority said Goldman Sachs made about $350m on derivatives trades that it described as 'worthless.'

Bloomberg reports that Africa’s second-largest sovereign wealth fund sued Goldman Sachs on January 21st at a London court over investments of about $1bn made in 2008. LIA employees never fully understood the transactions, which 'expired worthless' in 2011, the fund said in court documents released Thursday.

'The unique circumstances allowed Goldman Sachs to take advantage of the LIA’s extremely limited financial and legal experience to deliberately exploit its position of influence and to take advantage in a way that generated colossal losses for the LIA but substantial profits for Goldman Sachs,' LIA Chairman AbdulMagid Breish said in an e-mailed statement.

Staff at the firm offered to train LIA employees at its London offices, took them on a trip to Morocco and bought them gifts of aftershave and chocolates to build a relationship, the fund said in the court filing. The 2008 derivatives were linked to shares in Citigroup, Electricite de France and Banco Santander SA.

To access the complete Bloomberg article hit the link below:

Libya Fund Says Goldman Made $350 Million on 'Worthless' Trades

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