Och-Ziff Capital Management Group, a publicly traded hedge fund firm, disclosed in a quarterly filing this week that it has accrued a $200 million loss, thus far, to resolve violations of the Foreign Corrupt Practices Act.
Och-Ziff said it has been under investigation by the SEC and Department of Justice since 2011 concerning possible violations of the FCPA and other laws. “The investigation concerns an investment by a foreign sovereign wealth fund in some of our funds in 2007 and investments by some of our funds, both directly and indirectly, in a number of companies in Africa,” the company first disclosed in a Form 10-K in 2014.
“We recently have begun discussions with the SEC and DOJ concerning resolution of these matters,” the company said.
Based on these discussions, Och-Ziff said its “probable” that the government will pursue civil and criminal sanctions. “We believe it is probable that the amount will be in excess of $200 million, but we are unable to estimate an amount at this time. Any resolution could have a material adverse effect on our business, financial condition or results of operations.”