Executing Losing Trades For Libyans Put Goldman Sachs Execs At The Business End Of A Hissy Fit (Update)

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In early 2008, Libya's sovereign-wealth fund controlled by Col. Moammar Gadhafi gave $1.3 billion to Goldman Sachs Group to sink into a currency bet and other complicated trades. The investments lost 98% of their value, internal Goldman documents show... In July 2008, Mustafa Zarti, the fund's deputy chairman, summoned Mr. Kabbaj, Goldman's North Africa chief, to a meeting with the fund's legal and compliance staff, according to Libyan Investment Authority emails reviewed by the Journal. One person who attended the meeting says Mr. Zarti was "like a raging bull," cursing and threatening Mr. Kabbaj and another Goldman employee. Goldman arranged for security to protect the employees until they left Libya the next day, according to people familiar with the matter.

Update: According to Lucas van Praag, the Libyans' anger was misplaced:

Van Praag said the trades that resulted in a huge loss for Libya were designed and approved by the LIA and that Goldman was hired to execute the trades. He also said the Journal report doesn't mention that in mid-2008, Goldman recommended restructuring the investments and asked the LIA if they wanted to discuss it. Van Praag said the LIA did not respond to Goldman's query.

[WSJ]

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