The Securities and Exchange Commission and Justice Department are investigating possible violations of the Foreign Corrupt Practices Act (FCPA) by Och-Ziff Capital Management. According to reports, a portion of a $150 million investment in African mining in 2008 went to foreign officials in Zimbabwe.
The hedge fund is reportedly in discussions with the U.S. Government to settle its investigation into other business dealings it had from Libya to South Africa. The investigation has been going on for four years now but was only disclosed last year following a report in the Wall Street Journal. In an earnings call, the company said it was hopeful the investigation and legal expenses would be complete by the end of the year. They also said that an enforcement action was reasonably likely.
Och Ziff has run into other trouble recently as well. Last month, an adviser to Och-Ziff funds agreed to pay $4.25 million for providing inaccurate trade reporting data to prime brokers. The reporting error led to inaccuracies in both records provided to the SEC during investigations as well as the books of broker-dealers. The four brokerages relying on Oz Management data had 552 million shares inaccurately listed on their books and records. The inaccurate SEC reports stemmed from requests for market data by the Commission in connection with insider trading or manipulation investigations. In total, 14.4 million shares were incorrectly reported to the SEC. Among the issues identified was in the reporting of trades as either long or short sales.
Do you have questions about this area of the law? We have put together an informational guide for FCPA whistleblowers. If you have questions after reviewing it, one of our FCPA whistleblower attorneys will answer any remaining questions. We can assist you in reporting your evidence of bribery by a publicly traded company or other covered entity to the U.S. Government. Please contact an attorney via our contact form or call 1-800-590-4116.