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Enforcement Action Dataset

 

Initiation Date:    09/29/2016  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Name of Prosecuting Attorneys:    Unknown

Assisting Agencies:    U.S. Department of Justice , Swiss Law Enforcement Agency , U.K. Law Enforcement Agency , Federal Bureau of Investigation , Internal Revenue Service , Gibraltar Financial Services Commission , Cypriot Securities and Exchange Commission , Jersey Law Enforcement Agency , Guernsey Law Enforcement Agency , Maltese Law Enforcement Agency , U.S. Attorney’s Office for the Eastern District of New York

Type of Action:    SEC Administrative Proceeding

Origin of the Proceeding:    Unknown

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Och-Ziff Capital Management Group LLC, a hedge fund incorporated in Delaware and headquartered in New York, controlled a variety of investment vehicles through myriad subsidiaries. The company provided investment advisory and management services to those vehicles in return for management fees and incentive income. Och-Ziff’s common stock was registered with the SEC and listed on the New York Stock Exchange.

OZ Management LP was a subsidiary of Och-Ziff that provided asset management services to Och-Ziff investor funds.

Daniel S. Och was the founder, Chief Executive Officer, and Chairman of the Board of Och-Ziff, as well as an officer and partner in OZ Management.

Joel M. Frank was the Chief Financial Officer for Och-Ziff and OZ Management, and an officer and partner in OZ Management.

Between 2007 and 2011, Och-Ziff paid bribes and made other suspicious or poorly documented payments through several intermediaries, agents, and business partners to high-ranking foreign officials in a variety of African countries, including Libya, Chad, Niger, the Democratic Republic of Congo, Zimbabwe, and Guinea. These bribes and payments were made with the knowledge and authorization of senior Och-Ziff personnel, while other Och-Ziff executives ignored the corruption risk in the transactions. In many instances, the transactions were approved by Och and Frank, though they did not know of the bribery.

On September 29, 2016, the SEC filed a settled administrative proceeding against Och-Ziff, OZ Management, Och, and Frank. Under the terms of the proceeding, Och-Ziff, Och, and Frank were ordered to cease and desist violations of the FCPA, and OZ Management was ordered to cease and desist violations of the Advisers Act. Furthermore, Och-Ziff and OZ Management were ordered to pay, jointly and severally, disgorgement of $173,186,178, and prejudgment interest of $25,858,989, for a total payment of $199,045,167. The SEC ordered Och to pay disgorgement of $1,900,000 plus prejudgment interest of $273,718, for a total payment of $2,173,718. On March 16, 2021, the SEC issued an order against Frank imposing a civil penalty of $35,000 against him.

On the same date, Och-Ziff entered into a Deferred Prosecution Agreement with the DOJ, and OZ Africa Management GP, LLC, an OZ Management subsidiary, pled guilty in a separate criminal proceeding. Under the terms of the DPA, Och-Ziff agreed to pay a criminal penalty of $213,055,689, which was also deemed to satisfy any penalty against OZ Africa Management.

A criminal complaint was filed on August 12, 2016 in the district court for the Eastern District of New York against Samuel Mebiame, a Gabonese national, based on his involvement in the Och-Ziff bribery scheme. On December 9, 2016, the DOJ filed an Information in the Eastern District of New York against Mebiame alleging conspiracy to violate the anti-bribery provisions of the FCPA. On the same date, Mebiame pled guilty to the charge. On June 14, 2017, the court sentenced Mebiame to 2 years in prison and ordered him to pay a mandatory assessment of $100.

In a related proceeding, on October 5, 2017, the DOJ filed a ten count indictment in the Eastern District of New York against Michael L. Cohen, a former Executive Managing Director at Och-Ziff, alleging (1) conspiracy to commit investmet adviser fraud, (2) investment adviser fraud, (3) conspiracy to commit wire fraud, (4-7) wire fraud, (8) conspiracy to obstruct justice, (9) obstruction of justice, and (10) making false statements. Cohen has also been sued by the SEC in a separate proceeding. Both cases are ongoing.

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