Bloomberg News

U.K. Fraud Office Says It’s Not Probing Banks in U.S. Fund Case

July 01, 2011

July 1 (Bloomberg) -- The U.K. Serious Fraud Office said it isn’t looking into specific banks on behalf of a U.S. investigation into sovereign wealth funds.

SFO Director Richard Alderman issued a statement today saying that he “indicated that should the SFO be asked we would assist our U.S. colleagues in any way we could.” The comments contradict earlier reports that the SFO was already assisting the U.S. authorities.

The U.S. Securities and Exchange Commission is examining whether transactions with Libya’s sovereign fund may have violated bribery laws, the Wall Street Journal reported last month, citing people it didn’t identify. SEC officials are reviewing documents including those related to a $50 million fee Goldman Sachs Group Inc. agreed to pay the Libyan fund to help recoup losses, the newspaper said. The payment was never made, it said.

HSBC Holdings Plc and Goldman Sachs are among banks that held funds for the Muammar Qaddafi-controlled Libyan sovereign wealth fund, London-based advocacy group Global Witness said earlier this year. HSBC held $1.42 billion for the fund as of Sept. 30 last year, up from $292.7 million three months earlier, the group said in a report today.

In an interview on June 28, Alderman said that the agency was “talking to the Americans about various issues.”

When asked about whether HSBC would be a focus for the SFO, Alderman replied, “Yes, that’s the thought.”

Reports that the SFO are looking at specific banks is “incorrect,” the agency said in the statement today. “We work closely with a range of U.S. authorities, the Department of Justice and the Securities and Exchange Commission in particular and with whom we regularly discuss matters of mutual interest. The director did not confirm any investigation into specific companies.”

HSBC spokesman Jezz Farr declined to comment.

--Editors: Peter Chapman, Christopher Scinta

To contact the reporter for this story: Lindsay Fortado in London at lfortado@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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