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Libya sues JPMorgan over $6 million bribe allegation

The Address | Benghazi Libya

LONDON – The Libyan Investment Authority sued JPMorgan Chase & Co. in London, saying the lender paid more than $6 million in bribes to secure a $200 million bond deal, Bloomberg reported on Tuesday.

Investment bank Bear Stearns, which was sold to JPMorgan during the 2008 global financial crisis, sent the payments to businessman Walid Al-Giahmi — a close friend of the Gaddafi regime in Libya — to arrange deals in a contract that was no more than a “sham” agreement, according to London court documents released Tuesday. The bank has until next month to submit defense documents in the case, which was filed in April.

Bear Stearns raised $200 million for the LIA in five-year notes after the services agreement with Giahmi was signed in July 2007. Neither Giahmi nor his firm Lands Company Ltd. “provided any legitimate services to Bear Stearns,” according to the LIA’s complaint.

The LIA says Giahmi may have acted “in the same way” on five sets of transactions involving other lenders, according to filings.

Instead, Giahmi bribed and intimidated the fund’s executive director Mustafa Zarti, other LIA executives and the head of an alternative investment team to enter into the bond agreements, the LIA said.

The oil wealth fund hasn’t been successful in all of its recent claims. A lawsuit against Goldman Sachs Group Inc. that sought to recoup lost investments was thrown out in 2016.

The case is The Libyan Investment Authority v. JPMorgan Chase & Co & Others, High Court of Justice, Business and Property Courts, Case No. CL-2018-000228.

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