September 30, 2016

How Goldman Sachs Lost $1.2 Billion of Libya’s Money

When Wall Street’s most aggressive bank took on the world’s most incendiary client, someone was going to make a killing.
On July 23, 2008, Kabbaj was in his room at the Corinthia, waiting anxiously for his mobile phone to ring. It finally did around 9 a.m., and he grabbed a pen and paper to take notes. On the line was Michael Daffey, a senior Goldman executive in London. 

Daffey praised Kabbaj’s work in Libya and said that after some negotiation, the bank was willing to guarantee him $9 million in pay. It was an astonishing sum, even at Goldman.

Kabbaj immediately asked for more. He knew he’d been instrumental in extracting an unusual amount of money from a highly unusual client. Who else on the planet could sell a billion dollars of derivatives to a regime whose theatrical despot slept in a tent under an all-female warrior guard?

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