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The Securities and Exchange Commission missed the boat with a lawsuit against two former leaders of
Och-Ziff Capital Management
LLC, having filed too late to seek damages as a result of a bribery scheme involving payments to senior officials across Africa, a judge statue.
Michael L. Cohen,
who led the European fund's hedge fund, and Vanja Baros, a leader for African affairs, orchestrated a sprawling program to bribe various African officials in exchange for business. They were the brains of the hedge fund's bribe program, and their behavior violated the Foreign Corrupt Practices Act, which bars Americans from bribing foreign officials to obtain or keep business, SEC said
. that the SEC's claims are "prescribed" because the most recent alleged transaction took place "more than five years before the SEC files a complaint".
The lawyers for MM. Cohen and Baros did not immediately respond to requests for comment. The SEC has stated that it is reviewing the decision
. The dismissal is the latest development of a long-standing saga that has resulted in one of the largest corrupt colonies abroad in the United States. Osh-Ziff agreed in September 2016 to pay $ 412 million to settle civil and criminal complaints filed by the SEC and federal prosecutors. The founder of the hedge fund,
Daniel Och,
accepted a civil fine of $ 2.2 million for record keeping violations in the case without admitting or denying the wrongdoing.
A spokesman for Och-Ziff declined to comment. At the 2016 settlement, Och said the events were "deeply disappointing" and called the hedge fund's conduct "inconsistent with our core values".
The judge in the case against MM. Cohen and Baros cited a court decision issued shortly after the SEC filed its complaint as part of the reason for the delay. In early June 2017, the Supreme Court ruled unanimously that the SEC had five years to prosecute alleged perpetrators, calling this recovery or disgorgement a penalty under the law. The court had previously ruled that a five-year limitation period applied to the civil monetary penalties that the SEC sought to collect.
The judgment rendered in June 2017 by the Supreme Court, in Kokesh c. SEC, is expected to have a significant impact on the SEC's pursuit of FCPA cases. These investigations usually take several years to resolve and have always included recoveries that go well beyond five years.
The judge said Friday that this five-year term was the key element of his dismissal. Both parties agreed that the transactions in question took place between May 2007 and April 2011, with the judge noting that the most recent took place more than five years before the SEC trial
. five years after his claims have accumulated, "said the judgment.
Writing to Samuel Rubenfeld at [email protected]
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