A Libyan official who helped review billion-dollar investments with Goldman Sachs said he had never heard of the bank or the word derivative before joining the country’s $60bn sovereign wealth fund in 2007.
Bloomberg News reports that Hisham Najah, now the Libyan Investment Authority’s chief investment officer, testified Wednesday in the fund’s lawsuit against Goldman Sachs over losses from trades in 2008.
“At the beginning our only research tool was Google,” Najah, then an analyst in the equities team, said in a witness statement filed in the case. “Before I joined the LIA, I had never heard of Goldman Sachs in my life.”
The Libyan fund’s $1.2bn lawsuit hinges on how well its employees understood 2008 derivatives trades linked to Citigroup Inc. and other stocks that went on to lose almost all their value. Goldman Sachs says the LIA was sophisticated enough to appreciate the risks, while the Libyan fund argues its inexperienced staff relied on Goldman bankers who abused their position of influence.
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