In 2008, Libya's sovereign wealth fund, controlled by dictator Muammar Gaddafi, gave $1.3 billion to Goldman Sachs Group to sink into a currency bet and other complicated trades, according to The Wall Street Journal.
An internal Sachs document seen by WSJ said that the investments eventually lost 98 per cent of their value.
"What happened next may be one of the most peculiar footnotes to the global financial crisis," the report said.
To make up for the losses, Goldman reportedly offered Libya the chance to become one of its biggest shareholders, according to documents and people familiar with the matter.
Negotiations that continued till 2009
eventually failed and the money could not be recovered.
As of last June, the Libyan Investment Authority had assets of about $53 billion.
WSJ reported that this year, US officials froze about $37 billion in Libyan assets, including some funds still managed by Goldman.
Last week, Global Witness, an international advocacy group, said that Gaddafi had stashed away billions of dollars of oil revenues on Wall Street and Europe.
The New York Times, which first reported on the document, said that Goldman Sachs, JP Morgan, HSBC Holdings and Societe Generale are among the major banks that have helped the strongman to invest some of the Libyan sovereign wealth fund's $53 billion.
