Legg Mason charged with violating Foreign Corrupt Practices ActStaff Writer | August 28, 2018
The Securities and Exchange Commission SEC) announced that Legg Mason Inc. will pay over $34 million to resolve an SEC charge that the company violated the Foreign Corrupt Practices Act (FCPA) in a scheme to bribe Libyan government officials.
America Entities engaged in a scheme to pay bribes to Libyan government officials
These entities engaged in a scheme to pay bribes to Libyan government officials through a Libyan middleman in order to secure investments.
As a result of the corrupt scheme, Legg Mason, through its Permal subsidiary, was awarded business tied to $1 billion of investments for the Libyan financial institutions, earning net revenues of approximately $31.6 million. According to the SEC’s order, the middleman used the term “cooking” to describe his ability to cause Libyan government officials to invest by any means necessary, including bribes.
The SEC’s order finds that Legg Mason violated the internal accounting controls provision of the Securities Exchange Act of 1934.
Legg Mason agreed to disgorge approximately $27.6 million of ill-gotten gains plus $6.9 million in prejudgment interest to settle the SEC’s case. Legg Mason had also previously agreed to pay $33 million to the U.S. Department of Justice in sanctions resulting from the firm’s involvement in the Libyan bribery scheme. ■