Goldman Sachs' dealings with Muammar Gaddafi's regime have come under scrutiny from US regulators investigating whether they broke anti-bribery laws.
The investment banking giant made the offer of a $50m (£31m) payment, which would have gone to the son-in-law of the state oil company boss, according to reports last week. Now it has emerged that the US Securities and Exchange Commission (SEC) is looking over documents related to the plan.
The payment was suggested at fractious talks between Goldman and the Gaddafi administration's sovereign wealth fund, the Libyan Investment Authority (LIA), which was set up to invest hundreds of billions of dollars of oil revenues. The LIA had given Goldman $1.3bn to make complicated currency bets and other derivative investments, but the bank had lost 98 per cent of the Libyan money when those bets turned spectacularly wrong.
An offer was eventually made to the regime in Tripoli to take preference shares in Goldman. Goldman also agreed to pay a fee of $50m, which would have then been passed on to an outside adviser, Palladyne International Asset Management, which was run at the time by a relative of the state oil company's chief executive.
The SEC is examining paperwork related to the proposed settlement under a tough US anti-bribery law, which sets stiff penalties for bribery by any company operating in the US, regardless of where the corruption happened. It also does not require that a bribe was actually paid. The examination, revealed by The Wall Street Journal, has not progressed to a full-blown investigation.
