SEC Examining If Goldman-Libya Connection Violated Bribery Laws

The Securities and Exchange Commission is examining whether Goldman Sachs Group Inc and some other financial companies violated bribery laws in dealings with Libya's sovereign-wealth fund, the Wall Street Journal reported, citing people familiar with the matter.

Enforcement lawyers at SEC are reviewing documents that detail the firms' relationships with the Libyan Investment Authority controlled by the nation's leader, Muammar Gaddafi, the paper said.

The regulators are interested in a $50 million fee that Goldman initially agreed to pay the fund, but the payment was never made as discussions were halted before violence erupted in Libya early this year, the paper said.

The absence of a transaction does not exempt the bank from the federal Foreign Corrupt Practices Act, which bans U.S. companies from offering or paying bribes to foreign government officials or employees of state-owned companies, the paper said.

The Journal added that Carlyle Group, Och-Ziff Capital Management Group, JPMorgan Chase and several other companies had significant dealings with the Libyan Investment Authority.

"We are confident that nothing we did or proposed was or could have been a breach of any rule or regulation," the Journal quoted Goldman spokesman Lucas van Praag as saying. "We retained outside counsel, as is our normal practice for any transaction, to ensure that we were compliant with all applicable rules."

An SEC spokesman declined to comment to the paper.

Reuters was unable to reach Goldman, Och-Ziff, JPMorgan, Carlyle or the SEC outside normal U.S. business hours.

The Journal said last week that Goldman invested more than $1.3 billion from Libya's sovereign-wealth fund in currency bets and other trades in 2008 and the investment lost more than 98 percent of its value.

(Reporting by Vaishnavi Bala in Bangalore; Editing by Lisa Von Ahn)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[NYCIsNot4Sale]

06:09 PM on 06/21/2011

GOLDMAN and Muammar Al-Gaddafi - What a Team!

BLOOMBERG SHOULD MAKE GOLDMAN SACHS PAY NEW YORK CITY, NOT TRIPOLI
SHORT LINK TO POST

Bloomberg’s threat of teacher layoffs, firehouse closings, elimination of day care slots and attempts to extort hundreds of millions from a health care stabilization fund that was established, in lieu of wage increases, to protect the precarious middle class incomes of city workers from spikes in health insurance costs is WRONG!

It’s good to be a friend of Bloomberg!

On the flip side, there’s Goldman Sachs, a friend/customer of Bloomberg L.P., one of the masters of the universe on Wall Street, which enjoys hundreds of millions in real estate tax abatement's, compliments of the New York City taxpayer, for their new office towers and luxury condos near the World Trade Center.

While Goldman Sachs’ caters to Dictator in Tripoli, it snubs its nose at New York City!

Did you know that Goldman Sachs was willing to make Libya’s Muammar Al-Gaddafi whole after losing nearly a billion dollars in bad investments!

Considering their role in the billions in losses suffered by pensions and city revenues why aren’t they offering the same to New York City?

Why isn’t Bloomberg demanding that Goldman Sachs and its ilk pay their fair share?

[globalguy]

07:36 PM on 06/10/2011

Is it just me or does the Colonel look a little like Arnold's ex mistress with a mustache?

[blindhammer]

02:59 PM on 06/10/2011

Goldman might be fined $5 million. On noes.

[skyer8]

07:37 AM on 06/10/2011

Goldman needs to be audited on every level. These guys have dodged too many bullets to be just luck. Very Fishy...

[Observer111]

01:21 AM on 06/10/2011

Everything is relative...Goldman lost 98% of a Libyan investment...tells you a lot ....but nobody died. Compare this to misguided potus sending troops to Iraq in search of phantom WMD, then losing a coo $1 tr and 5,000 people while occupying this country. Goldman was going to pay 50 mm to some sovereign fund to stop potential litigation....while CIA and US Military were paying billions of taxpayer's $ from cardboxes to some Iraqi "friends" of US without proper documentation...some of these GIs came back home very wealthy.

[kidcat24]

08:25 PM on 06/09/2011

Please get these guys on something. They should be in jail now!

[tosc]

06:24 PM on 06/09/2011

this ought to be good...LOL....banks don't have a patriotic conscious...they bow to the money!

[FoxIslander]

06:11 PM on 06/09/2011

...so the great blood sucking squid lost (stole) 98% of one if its largest investors money? Certainly makes me want to invest at GS.

[almost homeless]

05:15 PM on 06/09/2011

There is a direct correlation to how much money goldman sachs makes and how many 100's of millions of people are miserable. The more they make the more people are miserable. For every billion they earn 10 million people fall into misery.

[almost homeless]

05:11 PM on 06/09/2011

Nothing a few SEC-GS booze cruises can't get them out of.

[tegeagent0007]

02:55 PM on 06/09/2011

What a joke!. The SEC trying to take down Goldman, the most powerful and smartest financial institution in the world. Good luck with that while SEC lawyers are trying to find Weiner's latest pic of his **** as we speak.

[Trustfunded1]

02:45 PM on 06/09/2011

Meh...Goldman will just use the stolen loot to pay the petty fines while greasing some politico's palms to reign in the useless SEC.

Besides if any of the toads at the SEC every want a career on Wall Street after the SEC gig they better play nice.

[Karma2U]

02:08 PM on 06/09/2011

Domestic and foreign terrorists in bed together spawning corruption and destruction. Love of money is the root of all evil!

[antipodal2u]

12:51 PM on 06/09/2011

Like a mafia loanshark collecting unpaid debts.

[somewhatodd]

12:45 PM on 06/09/2011

" Goldman invested more than $1.3 billion from Libya's sovereign-wealth fund in currency bets and other trades in 2008 and the investment lost more than 98 percent of its value. "

hmmm