New York-based hedge fund Och-Ziff Capital Management Group (the “Hedge Fund”) agreed to pay approximately $412 million to resolve charges brought by the U.S. Securities and Exchange Commission (“SEC”) and Department of Justice (“DOJ”) on September 29, 2016. The charges related to the company and its subsidiaries violating the anti-bribery, record-keeping and internal accounting controls provisions of the U.S. Foreign Corrupt Practices Act ("FCPA") in connection with illicit payments made to government officials in various countries in Africa. This action highlights for companies the importance of implementing and monitoring effective compliance programs.
This is the first major FCPA enforcement action against a financial services company, and the total penalty represents the fourth-largest FCPA action to date. It also demonstrates the focus of the U.S. Government on holding accountable both companies and individual executives, as well as the importance of not only conducting due diligence on third parties, but also following up on corruption-related red flags identified during diligence.
Read "FCPA Enforcement Action Highlights Risks for the Financial Services Industry and Individual Executives