Legg Mason (LM) has set aside $67 million as part of an expected resolution of a Foreign Corrupt Practices Act investigation into activities of a hedge fund unit that managed money for the Libyan government of Moammar Gadhafi.
Negotiations to close investigations of Legg Mason's Permal Group are expected to be completed "shortly," the Baltimore-based asset management firm said in a filing Wednesday.
"The matter does not relate to any of our or our affiliates' current business activities or client relationships and has focused on the actions of former employees of Permal who left that firm four or more years ago," the firm said in its fiscal year-end filing. It declined to comment beyond the filing.
Legg Mason said it accrued a $67 million charge for the year ended March 31, including $31 million earned by Permal managing money for Libya. The investments were made in calendar years 2005 to 2007 and terminated no later than 2012. In 2016, Legg Mason combined Permal with EnTrust Capital, another alternative asset management affiliate, to form EnTrustPermal.
Mr. Gadhafi seized control of Libya in a 1969 coup d'etat and ruled until he was captured and killed by rebels in 2011.