SEC looks into Goldman-Libya relationship

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WASHINGTON, June 9 (UPI) -- U.S. security regulators are examining if Wall Street firms violated bribery laws in dealings with Libya's sovereign wealth fund, The Wall Street Journal said.

Securities and Exchange Commission enforcement lawyers are reviewing documents detailing relationships of the firms, including Goldman Sachs Group Inc., with the Libyan Investment Authority controlled by Libyan leader Moammar Gadhafi, people knowledgeable about the investigation told the Journal in an article published Thursday.

Among other things, SEC officials expressed interest in a $50 million fee Goldman initially agreed to pay the Libyan sovereign wealth fund as part of a proposal Goldman made to help the fund recoup losses, the sources said. The Libyan Investment Authority would have passed on the $50 million payment to an outside adviser.

While the payment wasn't made because of the popular uprising against Gadhafi, it remains subject to U.S. anti-corruption laws. Among other things, the law bans U.S. companies from offering or paying payments that could be considered bribes to foreign government officials or employees of state-owned companies, including people working for sovereign wealth funds.

"We are confident that nothing we did or proposed was or could have been a breach of any rule or regulation," Goldman spokesman Lucas van Praag said. "We retained outside counsel, as is our normal practice for any transaction, to ensure that we were compliant with all applicable rules."

An SEC spokesman declined to comment. The agency's interest in the Libya-related documents doesn't mean the SEC will conduct a formal investigation.