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Judge Dismisses SEC Bribery Case Against Och-Ziff

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By William Vogeler, Esq. on July 17, 2018 3:57 PM

Surviving a criminal investigation is not exactly a comeback, but it's better than the alternative.

Och-Ziff executives dodged a big bullet when a federal judge dismissed a bribery case against them. The judge said the Securities and Exchange Commission missed a five-year deadline to sue them.

Michael Cohen and Vanja Baros may have breathed a sigh of relief, but the company is still reeling from a $412 million payment to settle related investigations. For now, Och-Ziff is open for business.

Bribery Charges

OZ's Africa Management paid the settlement and pleaded guilty to a criminal conspiracy charge in 2016, but the SEC wanted more from Cohen and Baros. Cohen -- not President Trump's lawyer -- was in charge of the hedge fund in Europe. Baros was an executive with the Africa-related business.

They were accused of arranging bribes for natural resource deals and investments in Chad, the Democratic Republic of Congo, Guinea, Libya, and Niger. The SEC said they also used investor money, not the company's capital.

However, Judge Nicholas Garafis said recent Supreme Court decisions barred the lawsuit. It was filed in 2017 over transactions that took place between 2007 and 2011.

The SEC claimed Cohen agreed to stay the statute of limitations, but the judge said the agreement lacked the "broad language" to prevent dismissal.

No Comeback

Known as the "comeback billionaire," Dan Och had hoped to get the hedge fund running again after the criminal scandal. But despite the recent legal victory, it hasn't worked out that way.

The company lost $7.6 billion in client withdrawals last year, even while performing its best since 2013. Robert Shafir succeeded Och as chief executive officer this year.

According to Bloomberg, the company has "collected inflows to start 2018 off right."

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