On March 18, 2016, the Libyan Investment Authority (LIA), a sovereign wealth fund set up by dictator Colonel Muammar Gaddafi in 2006, filed suit in London at The High Court of Justice’s Chancery Division against Goldman Sachs International.
The suit claims the fund paid Goldman approximately $350 million to set up trades the LIA says it didn’t understand, which lost the fund $1.2 billion, everything it invested.
Instead of fraud, the LIA claims its “causes of action” are “undue influence” and “unconscionable bargain.”
Goldman decided not to settle and believes it can beat the charges because, you know, there was never any undue influence and Goldman Sachs is not unconscionable.
The suit will be decided this October.
In short, the LIA claims the Great Vampire Squid’s blood-funnel bankers, traders, and especially one junior salesman, cozied up to the “nascent” sovereign wealth fund’s managers and traders, who all had “limited legal and financial expertise,” by entertaining them lavishly at expensive restaurants and hotels, plying them with gifts and prostitutes, training them enough to claim they should have known what they were buying, employing the deputy executive director of the fund’s younger brother, and finally inducing them into putting on leveraged derivatives trades that amounted to an unconscionable bargain.