LONDON, (Reuters) – The Libyan wealth fund’s former deputy chief screamed and cursed at Goldman Sachs bankers in a stormy meeting over derivatives trades made on the bank’s advice that ultimately turned out to be worthless, a witness told a court yesterday.
In a trial at London’s High Court, the Libyan Investment Authority (LIA) is trying to claw back $1.2 billion from Goldman Sachs related to nine disputed trades carried out in 2008.
The LIA argues Goldman took advantage of its financial naivety by first gaining its trust, then encouraging it to make risky and ultimately worthless investments.
Goldman Sachs denies the allegations and says the trades in question “were not difficult to understand”.
The LIA called as its final witness Catherine McDougall, a former Allen & Overy lawyer who was seconded to the LIA in July 2008 by Allen & Overy to assist and provide training to the LIA’s legal team.
McDougall said that from her conversations with LIA staff, specifically members of the Equities team, she found they had no idea what they had actually purchased. They were under the impression they had bought shares or “quasi shares” whereas the products they had were “completely synthetic”.
