"The Mexican "bailout" attracted criticism in Congress and the press for the central role of the former Co-Chairman of Goldman Sachs, U.S. Treasury Secretary Robert Rubin. Rubin used a Treasury Department account under his personal control to distribute $20 billion to bail out Mexican bonds, of which Goldman was a key holder."
Goldman Sachs did all right from that deal. Now, however, it may not do so well with its deals in Libya. In 2008, Goldman Sachs was asked to invest $1.3 billion in a currency bet. The trade cost Khadafy 98% of his investment. Now Goldman Sachs is being investigated by the SEC for bribery in those deals with Libya:
SEC Probes Goldman Over Libya Deals
By Samuel Rubenfeld - Corruption Currents
Goldman Sachs Group Inc. said in a securities filing regulators are investigating whether the firm violated U.S. foreign bribery laws.
The Wall Street Journal reported Wednesday on the filing, which was made late Tuesday. Goldman said in the filing that a probe of the company’s “compliance with the U.S. Foreign Corrupt Practices Act” was among the string of investigations and regulatory reviews it faced in the past quarter.
The revelation was part of an 8,179-word “Legal Proceedings” section of its quarterly report to the Securities and Exchange Commission.
Goldman didn’t elaborate further in the text of the filing and declined to comment to the Journal about it. The SEC also declined to comment to the Journal.
Sources told the Journal that the SEC is looking over Goldman’s dealings with Libya’s sovereign-wealth fund, known as the Libyan Investment Authority. Goldman made options trades for the fund in 2008, but the trades ended up losing $1 billion.
The Journal reported in June about the scrutiny over Goldman’s work with the LIA, focusing on an initial agreement to pay the fund a $50 million fee to help it recoup some of the losses. Though Goldman never made the payment, it is still potentially exposed to the FCPA, which bans bribing — or offering to bribe — foreign officials to keep or obtain business.
Libya’s sovereign-wealth fund planned to pass the $50 million fee to an outside adviser called Palladyne International Asset Management BV, which was owned at the time by the son-in-law of the head of Libya’s state-owned oil company, documents reviewed by the Journal said.
The SEC’s investigation of Goldman is separate from its ongoing examination of ties between financial firms and sovereign-wealth funds, sources told the Journal.
See the article here