Och-Ziff Capital Management Group LLC (OZM), the hedge-fund firm run by Daniel Och, fell after saying U.S. regulators are investigating whether it broke bribery laws in accepting an investment from a sovereign wealth fund.
Och-Ziff received subpoenas starting in 2011 from the U.S. Securities and Exchange Commission as part of a probe into possible violations of the Foreign Corrupt Practices Act, the New York-based company said in a regulatory filing yesterday. The Justice Department has requested information from Och-Ziff as part of the same investigation, according to the filing. Its shares fell the most in more than a month.
The sovereign fund referenced by Och-Ziff in its filing is the Libyan Investment Authority, 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 Muammar Qaddafi’s regime in 2011.
Jonathan Gasthalter, a spokesman for Och-Ziff at Sard Verbinnen & Co., said he couldn’t comment beyond the filing.
Och-Ziff slipped 3.5 percent to close at $13.71 in New York. The shares have gained about 40 percent 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 may 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.
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