Libyan Investment Authority Sues Goldman Sachs for Selling Them "Worthless" Investments
Goldman Sachs remains a troubled—at least in terms of public perception, not profit margins—company that has been at the center of the financial crisis since before it was a crisis. Despite an effort by the company to make, as Forbes put it, “a complete record of the firm’s relationship with every single client” and establishing a number of committees in the firm dedicated to keeping transactions on the up-and-up, the company is still struggling to win back the trust of investors and clients.
One such disgruntled client is the government of Libya, who sued Goldman Sachs in London for duping the country’s financial ministers into buying “worthless” financial products that ultimately lost the country $1.2 billion.
When economic sanctions were lifted by the U.N. against Libya in 2003, American and British banks courted the Libyan government for investments. In 2007, Goldman Sachs had firmly ensconced itself with the government by allegedly offering jobs to officials’ family members, gifts, and elaborate presentations.
Writer for The Daily Beast and “The Reformed Broker” blog Joshua Brown, calls Goldman Sachs “magnificent bastards” and essentially credits the downfall of Gaddafi’s regime to the bank. He writes, unironically as far as Opposing Views can tell, “It is highly probable that we’ll never hear a fully detailed account of Goldman’s courageous maneuvers in the business district of Tripoli, working from the inside to bring about the final days of Gaddafi’s reign. It is also unlikely that the firm will ever even take any credit, its stoicism on the matter yet even more proof of the firm’s innate nobility.” Brown even implies that the bank was acting with the approval of the Department of Defense.
Instead, what’s more likely is that Goldman Sachs was simply operating in a manner consistent with their overall M.O., and siphoned the wealth from Libya’s coffers as it would any other rich sap who’d buy the idea that he or she was the firm’s “partner.”