According to documents released this week, Goldman Sachs Group Inc will be petitioning for the presiding judge to dismiss the case the Libyan Investment Authority has filed over securities that were allegedly worthless.
LIA claimed in its lawsuit, which was filed in London's High Court, that Goldman had taken advantage of the relationship the two had formalized back in 2007. The Libyan fund said that its trust and confidence placed in the Wall Street bank had resulted to the former placing money on several large investments and trades. The Wall Street Journal reported that the trades were inadequately documented by Goldman.
LIA also claimed that the equity derivatives trades that were handled by Goldman in 2008 valued at over a billion dollars, were found to be worthless in 2011. The Libyan fund said that Goldman benefited greatly from the relationship, earning an estimated $350 million from the investments it had handled for LIA. LIA is seeking $1 billion to recover the losses from the trades.
WSJ said that the LIA's argument in the lawsuit is that the sovereign wealth fund was not sophisticated in its investments Goldman has offered and subsequently handled. The newspaper said that this line of argument has been an ongoing theme in the lawsuits filed against Goldman since the financial crisis. Bloomberg noted that the LIA also sued Societe Generale SA for the same claims in a $1.5 billion lawsuit. The Libyan fund also claimed that the French bank had bribed a friend of the Qaddafi family, whose influence was able to secure the investments.
In a response to Goldman's plans to file a motion to dismiss the lawsuit, LIA said, "(It) considers this application to be misconceived and looks forward to full and proper determination of all issues by the English court."
When Bloomberg asked Goldman about the lawsuit, spokeswoman Fiona Laffan for Goldman refused to comment on the matter.
