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Justice Department Probes Hedge Fund Dealings in Libya

imagesNew York (HedgeCo.Net) – The US Justice Department has started looking at banks, hedge funds and private equity funds that may have broken anti-bribery laws in their dealings with the Libyan sovereign wealth fund, which is run by Libya’s government, WSJ reports. The Libyan fund says the US bankers knew the country was weak and took advantage of them.

The same fund is currently suing Goldman Sachs for more than $1 billion in London’s high court, alleging that the investment bank exploited the lack of financial expertise at the Libyan investment fund. The Guardian reports that the Libyan sovereign wealth fund is accusing Goldman Sachs of causing approximately $1 billion in losses between 2007 and 2011, while making $350 million in profits for itself.

The Foreign Corrupt Practices Act of 1977 makes it illegal for entities to make payments to foreign government officials to assist in obtaining or retaining business. “Specifically, the anti-bribery provisions of the FCPA prohibits payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.” The DOJ states.

Besides Goldman Sachs, the Justice Department and other investigators are looking into Credit Suisse, J.P. Morgan, Société Générale, Blackstone Group and hedge fund operator Och-Ziff Capital Management, the WSJ reports.

Alex Akesson
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alex@hedgeco.net
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One Response to Justice Department Probes Hedge Fund Dealings in Libya

  1. UnCoverUp says:

    As conduits for bribes paid to the Gaddafi family, the banks, private equity firms and hedge funds were indeed co-conspirators in a broader criminal conspiracy organized by international oil companies (IOCs), aided and abetted by the Bush-Cheney administration in the US and the Blair government in the UK. The objective of the IOC conspiracy was to profit from the US/UK governments’ selective non-prosecution of blatant violations of the US Foreign Corrupt Practices Act (FCPA) and the UK Serious Fraud Act (SFA) under the guise of “normalizing” US/UK IOC’s relationships with Gaddafi. The US DoJ and UK SFO should also investigate the underlying IOCs criminal conspiracy to gain favor with Gaddafi by “lobbying” the Bush-Cheney and the Blair governments with promises of future employment/investment opportunities in quid pro quo for corruptly motivated executive orders that forgave the judgment debts Libya owed families of the victims of Gaddafi-sponsored terrorism. See “IRA victims plan to sue Tony Blair over Libya ‘conniving’ at http://www.telegraph.co.uk/news/politics/tony-blair/10597224/IRA-victims-plan-to-sue-Tony-Blair-over-Libya-conniving.html and “ConocoPhillips Shareholder Proposal — 2012″ at http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2012/rogerparsons031312-14a8.pdf)

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