Police are investigating allegations City bankers plied Gaddafi-era Libyan officials with luxurious parties in Morocco and invitations to a London lingerie modelling party in the hope of persuading them to invest billions of dollars of their country’s oil money.
The Wall Street Journal yesterday documented emails between the international brokerage Tradition Financial Services, which has offices in London and around the world, and their contacts.
One exchange has a Tradition broker recounting to an outside trader how, at a party in a luxury Marrakech villa rented by Tradition, a prostitute was “stripping in front of 11 guys” while they apparently offered her money to perform lewd acts.
The cache of emails being trawled through by the police are part of wider investigations into how bankers, often operating out of London, are claimed to have gone about winning investment money from Colonel Gaddafi’s state-owned Libyan Investment Authority before his regime fell in 2011.
The emails continue with coarse banter between Tradition brokers and staff at the Arab Banking Corp, which was a government-controlled fund that handled some of the Libyan Investment Authority’s trading operations.
Further emails suggest an executive of the Arab Banking Corp asked for help getting a Cartier watch with a sapphire winding mechanism. The WSJ said he even specified he preferred gold with no diamonds. The investigators are assuming this was a request for such a watch. A Tradition spokesman has denied any knowledge of the watch being purchased.
At London Fashion Week in 2010 Tradition is said to have invited Arab Banking Corp executives to join them at a private lingerie modelling party.
City of London Police have interviewed several former Tradition staff over their activities and are said to be close to deciding whether to bring charges.
The investigation has been progressing as the Libyan Investment Authority, under the post-Gaddafi regime, pursues a civil case set for the High Court in London against Goldman Sachs and Société Générale alleging they exploited the fund’s lack of financial nous. Goldman Sachs also stood accused in the civil lawsuit of plying Libyan executives with gifts and luxury trips to Morocco. Both SocGen and Goldman Sachs deny wrongdoing.
Tradition did not return calls seeking comment last night, but the company has said it is co-operating with the UK investigations. It adds that former employees, rather than Tradition itself, are being investigated and said the company was a victim of fraudulent expenses claims for inappropriate entertainment. “We do not believe that any misconduct amounted to corruption,” the spokesman added.
The WSJ, citing British investigators, alleges Tradition charged the Libyans commission of sometimes three times what it levied on other clients, with fees estimated by the Financial Conduct Authority regulator totalling £8.9m in 2008 and 2009 – a figure Tradition disputes.
Tradition also introduced other London bankers to Libyan financial contacts at the Marrakech parties, the paper claimed. Sordid emails had a euphemism for the Marrakech jaunts, with one executive describing them as an “NSL zone”, which stands for No Sperm Left.
Accounts for Tradition Financial Services Limited in London show it is owned by Switzerland’s Viel et Compagnie Finance group. The most recent set, for the year to 31 December 2012, also show three directors resigned during that year. The Libyan fund’s investments in London included the building housing Tradition in the City.
Arab Banking Corporation has declined to comment.