Gaddafi's Wealth Fund Turned Down Madoff, Stanford

Feb 24 2011 | 9:37am ET

He may be a despot with questionable fashion sense, but Libya’s Muammar Gaddafi apparently knows a Ponzi scheme when he sees one.

According to a U.S. diplomatic cable reporting a January meeting between Mohamed Layas, the head of the Libyan Investment Authority (the country’s secretive sovereign wealth fund) and the U.S. ambassador in Tripoli, Layas declined to invest with fraudsters Bernie Madoff and Allen Stanford.

The LIA claims to control $32 billion in liquid assets, most of which is deposited in U.S. banks. Besides passing on Madoff and Stanford, the cables also show Layas expressing his concern that Lehman Brothers was mismanaging Libyan investments.

Part of the text of the cable reads as follows:

6.(C) Layas denied press reports that the LIA had invested USD 100 million with the infamous Allen Stanford. He said that he had personally written a letter to the "Financial Times" disputing the information, explaining that Stanford had approached the LIA in the middle of his crisis, offering a 7-8% share in his investment scheme, but Layas had refused. Layas also mentioned having been previously approached by Bernard Madoff about an investment opportunity, "but we did not accept."


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...