Goldman Sachs bankers paid for prostitutes, private jets and five-star hotels and held business meetings on yachts to win business from a Libyan investment fund set up under Gaddafi regime, the high court in London was told yesterday.
The allegations came at the start of a legal claim by the Libyan Investment Authority for $1.2bn (£846m) from the investment bank. Lawyers for the LIA are claiming for losses on nine trades that Goldman Sachs executed for the fund between January and April 2008.
The LIA lost almost all its investment through the trades – one of which was the largest that the bank had undertaken in a single stock – while Goldman Sachs generated “eyewatering” profits of over more than $200m from the trades, Roger Masefield, a QC for LIA, said.
The LIA, Masefield told the court, felt betrayed as the trades generated excessive profits for Goldman and were unsuitable for the LIA, which was staffed by individuals who had not been appointed on merit.
Once the losses emerged, Masefield said one Libyan official described Goldman as the “bank of mafiosa”.