By John Lee.
US-based investment management firm Legg Mason has set aside $67 million as part of an expected resolution of an investigation into its money-management activities for Libya’s Gaddafi regime.
In an official filing on Wednesday, the company said:
“We expect that we will shortly complete negotiations with both the U.S. Department of Justice (“DOJ”) and the SEC staff to resolve a Foreign Corrupt Practices Act investigation concerning the activities of our former Permal business in connection with managing assets of Libyan governmental entities in structures established by a third-party financial institution.
“Those investments were made in calendar years 2005 to 2007 and all were terminated no later than 2012. The matter does not relate to any of our or our affiliates’ current business activities or client relationships and has focused on the actions of former employees of Permal who left that firm four or more years ago.
“Based on discussions to date, we believe that any resolution of this matter will not result in restrictions on our or our affiliates’ ongoing business activities. We have accrued a $67 million charge to earnings for this matter in the year ended March 31, 2018, representing our current estimated liability for the settlement of the matter.
“This accrual reflects in part the net revenues of approximately $31 million earned by our former Permal business from managing assets of Libyan governmental entities.
“Any such resolution, including the actual amount of the payments required to ultimately settle this matter, which are uncertain and may be higher than the amounts we have currently accrued, are subject to the final review and approval of the DOJ, the SEC Commissioners and our Board of Directors.“
(Source: Legg Mason)