Och-Ziff Capital Management Group will pay nearly $200 million to settle SEC charges of bribing African government officials, and a criminal penalty of $213 million as part of a deferred prosecution agreement with the Justice Department.
Its subsidiary, OZ Africa Management GP, agreed to plead guilty.
According to the SEC order, Och-Ziff executives ignored red flags and corruption risks and permitted illicit transactions to proceed. Och-Ziff Chairman and CEO Daniel S. Och will pay nearly $2.2 million to settle charges that he violated certain provisions of the Foreign Corrupt Practices Act, along with Chief Financial Officer Joel M. Frank, who also settled the charges but whose penalty will be announced later. Both men settled without admitting or denying the findings.
“Och-Ziff engaged in complicated, far-reaching schemes to get special access and secure significant deals and profits through corruption,” SEC Enforcement Director Andrew Ceresney said in a statement announcing the settlement Thursday.
Mr. Och said in a separate statement it “has been a deeply disappointing episode. This conduct is inconsistent with our core values and not representative of our hundreds of employees worldwide, who are dedicated to serving our clients with the utmost integrity. We have learned from this experience and taken significant steps to strengthen Och-Ziff. We are pleased to bring this matter to a conclusion and remain focused on generating returns in our funds.”
The Securities and Exchange Commission, which has been proactively scrutinizing how financial services firms obtain investments from foreign sovereign wealth funds, found that Och-Ziff used intermediaries, agents and business partners to pay bribes to high-level government officials to manage money for the $60 billion Libyan Investment Authority sovereign wealth fund, Tripoli, and to secure mining rights in Libya, Chad, Niger, Guinea and the Democratic Republic of the Congo.
The SEC said its investigation is continuing.
Och-Ziff and OZ Management LP will pay $173 million in disgorgement plus $26 million in interest for a total of $199 million to settle the SEC case.