The Libyan Investment Authority (LIA) has lost a $1.2bn court case against the US Goldman Sachs in the London High Court.
The sovereign wealth fund had filed a suit in 2014 alleging that Goldman Sachs took advantage of LIA employees lack of financial expertise to make undue profits.
The case related to nine complex derivatives trade in 2007 and 2008 worth a total of $1.2bn. The LIA lost its entire investment when stock markets crashed in 2008, while the bank made a $200m profit.
The judge ruled that the bank did not have undue influence or make excessive profits.
LIA also alleged that a Goldman Sachs employee acted improperly by offering a paid internship to the brother of Mustafa Zarti, a senior official at the fund and took him on holidays to Morocco and Dubai, including paying for prostitutes. The judge criticised his actions, but found they did not go beyond the normal cordial and mutually beneficial relationship that grows up between a bank and client.
The LIA is now considering its options.
The leadership of the LIA has always been clear that it would do all it could to pursue those who exploited the fund in the late 2000s, said Ali Mahmoud Hassan, president of the Interim Steering Committee of the Libyan Investment Authority. Todays ruling will not break our resolve and we remain focused on the other litigations raised by the previous Board of Directors to put right the wrongs suffered elsewhere in the past. Libyas wealth must be returned to the people of Libya.
The LIA is also bringing a $2.1bn case against Frances Societe Generale for similar transactions.
The $67bn LIA was set up in 2006 to manage and invest Libyas oil wealth.