Goldman Sachs Libya 'attack'
The US may be taking a backseat in the effort to oust Colonel Gaddafi, but the London division of its most famous investment bank, Goldman Sachs, seems to have inadvertently launched an attack of its own.
Back in 2008, Libya's sovereign wealth fund, controlled by the dictator, gave the bank $1.3 billion to invest after a series of meetings in its Fleet Street headquarters. Goldman promptly lost 98% of the cash in a series of disastrous trades investing in bank shares and currency options.
Furious bossses at the Libyan fund summoned Goldman executives to Tripoli for a meeting in which they were threatened. They were left so terrified that the bank arranged for a security guard to protect them until they left the country the next day, the Wall Street Journal reported.
Fearing the loss of such a lucrative client, Goldman's European boss Michael Sherwood, overall group chief executive Lloyd Blankfein and finance chief David Viniar held a series of internal discussions on how to mend relations.
The result was an offer to the Libyans to buy a big stake in Goldman - $3.7 billion in total - in a similar deal to that which saw Warren Buffett's Berkshire Hathaway invest $5 billion.
Libya decided that deal, and several other alternatives, were too risky given the collapse of Lehman Brothers. A different proposal presented last summer was never completed and sanctions were imposed on Libya's investments in February.
