DoJ : Legg Mason To Pay $64 Mln To Settle Libya Corruption Probe

(RTTNews) - Legg Mason Inc. (LM) agreed to pay $64.2 million to resolve the U.S. Department of Justice's investigation into violations of the Foreign Corrupt Practices Act (FCPA) in connection with Legg Mason's participation, through a subsidiary, in a Libyan bribery scheme.

According to Legg Mason's admissions, between 2004 and 2010, a Legg Mason subsidiary, Permal Group Ltd., partnered with Société Générale S.A., a multinational bank headquartered in Paris, France, to solicit business from state-owned financial institutions in Libya.

During this time, Société Générale paid bribes through a Libyan "broker" in connection with 14 investments made by Libyan state-owned financial institutions. For each transaction, Société Générale paid the Libyan broker a commission of between one and a half and three percent of the nominal amount of the investments made by the Libyan state institutions.

In connection with seven of the transactions, Société Générale paid commissions to the Libyan broker to benefit Legg Mason, through its subsidiary Permal, which managed funds invested by the Libyan state institutions. In total, Société Générale paid the Libyan Intermediary over $90 million, portions of which the Libyan broker paid to high-level Libyan officials in order to secure the investments from various Libyan state institutions for Société Générale.

As a result of the corrupt scheme, Société Générale obtained 13 investments and one restructuring from the Libyan state institutions worth a total of approximately $3.66 billion, and earned profits of approximately $523 million. Legg Mason, through Permal, managed seven of these investments and earned profits of approximately $31.6 million.