Goldman Sachs did not sign standard contracts before making options trades worth $1.3 billion for the Libyan sovereign wealth fund, The Wall Street Journal reports. The absence of contracts between Goldman and the Libyan Investment Authority (LIA) increased the conflict caused by the fall in value of the options by $1.25 billion.
Goldman made all the options investments without an ISDA Master Agreement, which codifies trading relationships. Libyan officials also did not sign a ‘long-form confirmation,’ which is used as a contract for a single trade or placeholder agreement between two sides while a master agreement is being negotiated.
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