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Och-Ziff African Unit Expected to Plead Guilty to Bribery
OZ Africa Management, a unit of the hedge fund giant Och-Ziff Capital Management, is expected to enter a guilty plea to bribery charges on Thursday, according to two people briefed on the matter.
Och-Ziff, a $39 billion hedge fund founded by Daniel Och, is also expected to enter into a deferred-prosecution agreement and pay a fine of around $400 million as it nears the end of a multiyear investigation, according to the people, who spoke on the condition of anonymity.
Mr. Och will also be named in a Securities and Exchange Commission administrative complaint and will enter an agreement over the firm’s inaccurate record-keeping, these people said. Mr. Och is not expected to have any prohibition with regard to serving as a director or officer of a public company and will make no admission of liability, according to one of these people.
The firm is being investigated by the S.E.C., as well the Justice Department, over whether it paid bribes to officials in countries including Zimbabwe, Libya and Congo. It has set aside more than $400 million to pay penalties related to the investigations, the company disclosed this year.
It also told investors that its partners were in talks to provide $500 million in part to help fund a settlement.
The government’s civil and criminal investigations are continuing, and prosecutors could also bring charges against individuals, the people briefed on the matter said.
If the firm pleads guilty, it would be the first time a publicly listed hedge fund has paid a penalty for violating the Foreign Corrupt Practices Act, a 1977 federal law that makes it illegal for an American company to bribe foreign officials to gain access to a deal.
One of the first hedge fund companies to publicly list itself, in 2007, Och-Ziff has increased its assets under management in recent years. But news of the government’s investigation has sent some investors fleeing, and the company has lost $5.5 billion in investor outflows so far this year, Och-Ziff recently disclosed.
The government’s investigation turns around Och-Ziff’s investment foray into Africa. The firm originally disclosed that it was under investigation for bribes that it made in Libya, Congo and Zimbabwe.
In August, federal investigators gained momentum in their multiyear investigation when they arrested Samuel Mebiame, a Gabonese consultant whom the government alleged paid bribes to officials in Niger, Guinea and Chad to secure mineral concession on behalf of a joint venture that included Och-Ziff. While the firm is not named in the complaint, people briefed on the matter had previously confirmed it was Och-Ziff.
The government is also investigating Michael L. Cohen, who led Och-Ziff’s investments in Africa and who was based out of the firm’s London office until he left the firm in 2013.
A representative for Mr. Cohen declined to comment.
Shares of Och-Ziff rose 5.7 percent on Wednesday, to close at $4.25.
Matthew Goldstein contributed reporting.
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