Say you're in charge of a bloodthirsty dictator's stolen $1.3 billion sovereign-wealth fund. You make some risky investments with that money in the early days of the global financial meltdown, and end up losing 98% (!) of it. Then imagine you're Goldman Sachs dealing with Muammar Qaddafi's money!
The Wall Street Journal has a great story today about just that. And there's more. Goldman apparently felt so bad about losing 98% (!) of a client's investments (and that they might miss out of other sovereign-wealth funds' cash) that the firm gave Qaddafi a chance to join the big boy's club:
Goldman offered the fund an opportunity to invest $3.7 billion in the securities firm. Between May and July of 2009, Goldman executives made three proposals that would have given Libya preferred shares or unsecured debt in Goldman, according to documents prepared by Goldman for the fund. Each proposal promised a stream of payments that would eventually offset the losses.
Then things got very dictator-y:
Libya was furious at Goldman over the nearly total loss of the $1.3 billion it invested in nine equity trades and one currency transaction, people involved in the matter say. A confrontation in Tripoli between a top fund executive and two Goldman officials left the bankers so rattled that they made a panicked phone call to their bosses, these people say. Goldman arranged for a security guard to protect them before they left Libya the next day, they say.
Thinking about two scheming Goldman officials scared shitless in Tripoli and making calls to daddy (Lloyd, perhaps?) is just too good. But surely Goldman Sachs learned a very good lesson from this, and will never, ever deal with awful, murderous bad people even if the money is just too good to be true.