The hedge fund firm previously known as Och-Ziff Capital Management will pay more than $137 million in restitution to investors, after the plan was approved by a federal court on Wednesday.
The payments signal the end of a long legal battle for the former Och-Ziff, which now operates under a new moniker, Sculptor Capital Management. Sculptor will pay restitution to more than 300 investors in the Congo-based Africo Resources Limited, a copper mine central to bribery allegations against the firm and others.
The allegations stemmed from a five-year investigation that revealed that one of Sculptor’s former executives, who was separately charged with fraud, paid bribes to government officials in Africa in order to secure mining deals for the company.
In 2016, Sculptor agreed to pay $213 million to the Department of Justice and $199 million to the Securities and Exchange Commission to settle the charges.
Until now, though, Africo’s investors have been left in the lurch. According to a letter filed in the court by Africo’s attorney, the copper mining company’s owners learned in 2007, while working to develop the mine, that the development rights had been taken from them through a court ruling.
The mine was subsequently developed through a joint venture between Sculptor and the Israeli businessman who had allegedly orchestrated that court ruling.
The Africo investors lost development rights as a result, which is why they sought compensation in court. The more than 300 investors will divide the restitution payment amongst themselves. A spokesperson for Sculptor declined to comment on the judge’s ruling.
[II Deep Dive: How an Och-Less Och-Ziff Changed Its Attitude, Its Leadership — and Its Name]
In an effort to put the African fiasco behind it, the firm formerly known as Och-Ziff has rebranded — twice. In 2017, the hedge fund firm changed its name to OZ Capital. Two years later, in 2019, OZ became Sculptor Capital Management.
Management changes also took place. In January 2018, founder and chief executive officer Daniel Och stepped down; outside hire Robert Shafir soon replaced him. Chief financial officer Alesia Haas resigned in April 2018, and just months later, co-founder David Windreich retired.
In June of this year, Sculptor announced that Shafir would depart and that chief investment officer Jimmy Levin will take the helm as CEO next April. Och had told clients in 2017 that Levin, who at the time was co-CIO, would eventually succeed him as CEO.
During October 2020, Sculptor’s master fund lost 1.02 percent, according to the monthly unaudited results included in the firm’s most recent 8-K. The fund’s net returns for the year are 11.3 percent. Sculptor had $35.6 billion under management as of October 31, a net decrease of $200 million since October 1.
