Libya's sovereign-wealth fund said it is cooperating with the U.S. Securities and Exchange Commission in its ongoing investigation into Goldman Sachs Group Inc. (GS) over the securities firm's dealings with the fund when Col. Moammar Gadhafi was in power.
The Libyan Investment Authority said in a statement that it also hired a law firm to discuss possible actions to recover losses it suffered from investments made in structured-finance products.
Before the financial crisis, Goldman and other financial firms sold complex investments to Libya as officials there looked for ways to put some of the fund's $50 billion in assets to work. Many of the investments plunged in value during the crisis.
People close to the Libyan investment fund said officials have authorized some former fund executives to give testimony to the SEC.
The officials also agreed to provide documents and other data to U.S. regulators about the fund's ties to Goldman, these people said. An SEC spokesman declined to comment. The identity of the London-based law firm couldn't be immediately determined. Goldman declined to comment.
The SEC has been scrutinizing Goldman's dealings with Libya's sovereign-wealth fund since the middle of 2011 over possible violations of U.S. anticorruption laws.
The Foreign Corrupt Practices Act bans U.S. companies from offering or paying bribes to foreign government officials or employees of state-owned companies.
The Libyan Investment Authority lost 98%, or about $1 billion, of a $1.3 billion bet on currencies and other complex trades done with Goldman in 2008, The Wall Street Journal reported in 2011. The Libyan fund's managers spent months negotiating with Goldman over possible ways to recoup its losses, but no solution was reached.
The SEC honed in on a $50 million fee Goldman initially agreed to pay the Libyan fund as part of a proposal to help the Libyans recover losses.
The Libyan fund would have transferred the fee to an outside adviser called Palladyne International Asset Management BV, which was managed at the time by the son-in-law of the head of Libya's state-owned oil company.
The SEC and the U.S. Justice Department have been more aggressive in recent years in enforcing antibribery laws. It is probing several financial institutions' dealings with sovereign-wealth funds.
The leadership of the Libyan Investment Authority has been in flux since Col.
Gadhafi's regime was toppled in 2011. Libya has been struggling to rebuild after a bloody revolution that toppled Col. Gadhafi after four decades of dictatorial rule.
Much of the sovereign-wealth fund's holdings have been frozen for more than a year. It has no standing board of directors, which means that fund executives haven't legally been able to execute substantial trades or sell any holdings.
There also is at least some disagreement among Libyan leaders about who should run the fund.
foxbusiness.com
The Libyan Investment Authority said in a statement that it also hired a law firm to discuss possible actions to recover losses it suffered from investments made in structured-finance products.
Before the financial crisis, Goldman and other financial firms sold complex investments to Libya as officials there looked for ways to put some of the fund's $50 billion in assets to work. Many of the investments plunged in value during the crisis.
People close to the Libyan investment fund said officials have authorized some former fund executives to give testimony to the SEC.
The officials also agreed to provide documents and other data to U.S. regulators about the fund's ties to Goldman, these people said. An SEC spokesman declined to comment. The identity of the London-based law firm couldn't be immediately determined. Goldman declined to comment.
The SEC has been scrutinizing Goldman's dealings with Libya's sovereign-wealth fund since the middle of 2011 over possible violations of U.S. anticorruption laws.
The Foreign Corrupt Practices Act bans U.S. companies from offering or paying bribes to foreign government officials or employees of state-owned companies.
The Libyan Investment Authority lost 98%, or about $1 billion, of a $1.3 billion bet on currencies and other complex trades done with Goldman in 2008, The Wall Street Journal reported in 2011. The Libyan fund's managers spent months negotiating with Goldman over possible ways to recoup its losses, but no solution was reached.
The SEC honed in on a $50 million fee Goldman initially agreed to pay the Libyan fund as part of a proposal to help the Libyans recover losses.
The Libyan fund would have transferred the fee to an outside adviser called Palladyne International Asset Management BV, which was managed at the time by the son-in-law of the head of Libya's state-owned oil company.
The SEC and the U.S. Justice Department have been more aggressive in recent years in enforcing antibribery laws. It is probing several financial institutions' dealings with sovereign-wealth funds.
The leadership of the Libyan Investment Authority has been in flux since Col.
Gadhafi's regime was toppled in 2011. Libya has been struggling to rebuild after a bloody revolution that toppled Col. Gadhafi after four decades of dictatorial rule.
Much of the sovereign-wealth fund's holdings have been frozen for more than a year. It has no standing board of directors, which means that fund executives haven't legally been able to execute substantial trades or sell any holdings.
There also is at least some disagreement among Libyan leaders about who should run the fund.
foxbusiness.com
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