London, Reuters—Goldman Sachs exploited a lack of financial knowledge at Libya’s sovereign wealth fund and a position of trust when it encouraged the fund to invest more than 1 billion US dollars in trades that ended up worthless, the fund has claimed in court documents.

The Libyan Investment Authority (LIA) last week filed a law suit against the US investment bank in London’s High Court, seeking to cancel a series of equity derivatives trades between January and April 2008 and the repayment of premiums paid to Goldman Sachs for its services.

In court documents seen by Reuters on Thursday, the LIA said Goldman took advantage of the fund’s “financially illiterate” staff, who had placed trust and confidence in the bank.

The LIA estimates Goldman made “substantial and unusually high” profit of around 350 million US dollars on the trades, which expired as worthless in 2011, the documents show.

A spokesperson for Goldman said: “We think the claims are without merit, and will defend them vigorously.”

The LIA became a Goldman client in August 2007, shortly after it began operating. Under the partnership, Goldman offered to train LIA staff in financial markets and products, alongside giving strategic investment advice, according to the filing.

The relationship between the two became so close that a Goldman executive addressed the LIA employees as his friends and frequently gave them small gifts, such as aftershaves and chocolates, the LIA said.

It was that executive who “heavily encouraged” the LIA to obtain exposure to stocks, including shares in Citigroup and EDF, on a leveraged basis by entering into a number of large long-dated complex derivatives transactions, it said.

The LIA said Goldman failed to properly document these trades, providing details only after they had been executed.

Only when it received those details did the LIA come to understand that the trades were not cautious investments, but rather “complex derivatives and synthetic instruments which represented highly speculative gambles”, it said.

In a statement accompanying the filing, AbdulMagid Breish, Chairman of the LIA, described the transactions as “unjust”.

“The unique circumstances allowed Goldman Sachs to take advantage of the LIA’s extremely limited financial and legal experience, to deliberately exploit its position of influence, and to take advantage in a way that generated colossal losses for the LIA but substantial profits for Goldman Sachs,” he said.

Goldman has just under two weeks to acknowledge service of the legal proceedings.