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The Morning Brief: SEC Charges Two Och-Ziff Execs in Bribery Scandal
The Securities and Exchange Commission filed bribery charges against two former executives of Och-Ziff Capital Management Group, calling them, “the driving forces behind a far-reaching bribery scheme.” The regulator alleges that Michael Cohen, formerly head of the New York multistrategy firm’s European office, and Vanja Baros, an investment executive on Africa-related deals, “caused tens of millions of dollars in bribes to be paid to high-level government officials in Africa.” The SEC also alleges that they “induced” the Libyan Investment Authority’s sovereign wealth fund to invest in Och-Ziff funds.
The pair is also accused of illegally directing efforts to secure beneficial mining deals by directing bribes to influence government officials in Libya, Chad, Niger, Guinea, and the Democratic Republic of the Congo. In late September, Och-Ziff, including its subsidiary OZ Africa Management, agreed to pay $413 million to settle the charges. In addition, CEO Daniel Och agreed to pay nearly $2.2 million to on charges that he and CFO Joel Frank caused violations of the Foreign Corrupt Practices Act (FCPA). Frank also agreed to settle the charges. Och-Ziff also said it expected to enter into a deferred prosecution agreement with the Justice Department as part of a parallel criminal investigation.
“As alleged in our complaint, Cohen and Baros were the masterminds of Och-Ziff’s bribery scheme that improperly used investor funds to pay bribes through agents and partners to officials at the highest levels of foreign governments,” said Kara Brockmeyer, chief of the SEC’s FCPA unit, in a press release.
Third Point Ventures, the venture capital arm of Dan Loeb’s Third Point, was one among a number of investors to participate in the $70 million Series C financing for SentinelOne, a cybersecurity company. The company said in a press release it plans to use the money to “aggressively expand its sales and marketing efforts to drive more than 400 percent global sales growth in 2017.” It will also use some of the money for research and development. This is at least the second investment made this week by Third Point Ventures, Dan Loeb’s private investment arm created in 2000 that focuses on technology, health care, and fintech. The unit relies solely on Third Point capital and does not take outside money. Earlier this week, we reported that Third Point Ventures led a newly completed $45 million Series D financing round for Aryaka, a provider of SD-WAN (software-defined wide area network) platforms to companies.
Shares of Valeant Pharmaceuticals International lost another 2.6 percent or so to close at $13.63 on Thursday. The stock is now down about 6.3 percent for the year and off 17 percent from its 2017 high on January 10.
Shares of hedge fund favorite Alphabet dropped more than 2 percent in after-hours trading after the parent of search giant Google reported mixed quarterly results. Alphabet missed analysts’ estimates for its earnings but beat revenue estimates. During the regular session, both classes of stock were down slightly.
Microsoft, on the other hand, rose slightly in after-hours trading after the software and cloud giant beat earnings and revenue estimates for the most recent quarter.