U.S. regulators are investigating a Goldman Sachs internship for the brother of a former official at Libya's sovereign wealth fund and perks allegedly offered by the bank to the fund, The Wall Street Journal reported on Thursday, citing people familiar with the matter.
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As part of an ongoing investigation into Goldman's ties to Libya's sovereign wealth fund, the Securities and Exchange Commission is reviewing the company's decision in June 2008 to hire the brother of Mustafa Zarti, then deputy chief of the Libyan Investment Authority, as an intern, the WSJ report said.
The report comes in the wake of allegations by Libya's sovereign wealth fund that the Wall Street bank exploited a position of trust by encouraging the fund to invest more than $1 billion in trades that ended up worthless.
The SEC opened its inquiry in 2011, the same year Col. Muammar Gaddafi was toppled by Libyan revolutionaries after 42 years ruling the country, the WSJ said.
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The investigators are also examining why the brother, Haitem Zarti, was permitted to remain employed by the firm for almost a year, longer than most internships, according to the report.
The SEC's investigation could lead to enforcement actions as soon as early next year, the paper cited one of its sources as saying.
A spokesman at Goldman Sachs declined to comment on the reported SEC investigation but confirmed that Zarti was an intern at the time.
—By Reuters