Libyan fund loses billion-dollar lawsuit against Goldman Sachs

A British court on Friday dismissed claims by Libyan officials that they had been duped by US bank Goldman Sachs into investments originally worth more than $1 billion which crashed in value as a result of the 2008 financial crisis.

The Libyan Investment Authority (LIA), one of the world's richest sovereign wealth funds, accused the bank of exploiting the fund's inexperienced staff and pushing them into a series of "inappropriate" transactions totalling $1.2 billion.

The LIA accused the investment bank of exploiting the fund's inexperienced staff, pushing them into "inappropriate" transactions in a series of shady deals.

It claimed a Goldman Sachs employee had embedded himself in the fund, gaining the trust of "young and impressionable staff," and sold it complex products, earning profits of more than $220m for the bank.

But a High Court judge ruled there had been no "undue influence" from Goldman Sachs over the LIA, a $67 billion sovereign wealth fund set up by former Libyan leader Muammar Gaddafi who was toppled from power and killed in 2011.

"Their relationship did not go beyond the normal cordial and mutually beneficial relationship that grows up between a bank and client," judge Vivien Rose said in a written decision.

The LIA said it was "naturally disappointed" with the outcome, adding in a statement: "Time will be needed fully to digest the judgment and all options are being considered at this time."

The case, brought in 2014, alleged that Goldman Sachs laid on lavish corporate hospitality and tried to garner influence with foreign trips and prostitutes.

The Wall Street giant denied any wrongdoing, arguing that the LIA lost money due to the global financial crash, not their close but controversial working relationship.

In a statement after the ruling, the bank said: “We are pleased to win this case, with a comprehensive judgment in our favour."