Och-Ziff Capital Management Group's stock fell 3.45% Wednesday after it announced U.S. regulators are investigating whether it broke bribery laws in accepting an investment from a sovereign wealth fund.
Och-Ziff, the hedge-fund firm run by Daniel Och, received subpoenas starting in 2011 from the Securities and Exchange Commission as part of a probe into possible violations of the Foreign Corrupt Practices Act, the company said in a regulatory filing Tuesday. The Justice Department has requested information from Och-Ziff as part of the same investigation, according to the filing.
The sovereign wealth fund referenced by Och-Ziff in its filing is the $65 billion Libyan Investment Authority, Tripoli, according to a person with knowledge of the matter who asked not to be identified because they weren't authorized to speak publicly. Regulators have been investigating how the LIA made investment decisions before the toppling of Moammar Gadhafi's regime in 2011.
Jonathan Gasthalter, a spokesman for Och-Ziff, said he couldn't comment beyond the filing.
Och-Ziff closed Wednesday at $13.71, down 3.45% for the day. The shares have gained more than 40% in the past 12 months.
Three years ago, the SEC began scrutinizing how banks, hedge funds and private equity firms were competing to manage large pools of government-owned cash. Providing kickbacks or gifts to employees of a sovereign wealth fund might violate laws that prohibit compensating government officials to win or keep business.
The SEC and Justice Department are also examining investments that Och-Ziff made “directly and indirectly” in a number of African companies, the filing said. Och-Ziff said it's not able to determine how the investigation will be resolved.
Peter Carr, a Justice Department spokesman, and Kevin Callahan, an SEC spokesman, declined to comment on the investigations.
