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Legg Mason paying $64M to settle Libyan bribery scheme charges

Asset manager Legg Mason Inc. will pay $64.2 million in penalties and disgorgement to resolve the U.S. Department of Justice's investigation into the company's involvement in a Libyan bribery scheme.

The company in May said it was close to completing its talks with the authorities to resolve the matter.

Legg Mason admitted that its subsidiary Permal Group Ltd. partnered with Société Générale SA, a multinational bank headquartered in Paris, from 2004 to 2010 to solicit business from state-owned financial institutions in Libya. During that time, SocGen paid bribes through a Libyan broker in connection with 14 investments made by Libyan state-owned financial institutions. SocGen paid commissions to the Libyan broker to benefit Legg Mason in connection with seven of the transactions, the Justice Department said.

As a result of the scheme, SocGen obtained 13 investments along with one restructuring deal from the Libyan state institutions worth about $3.66 billion and earned profits of about $523 million. Legg Mason, through Permal, managed seven of these investments and earned profits of about $31.6 million.

Legg Mason's $64.2 million payment includes a penalty of about $32.6 million to be paid to the U.S. Treasury within five days of the agreement and a disgorgement of about $31.6 million, which will be credited against disgorgement paid to other law enforcement authorities within the first year of the agreement.

Société Générale has already agreed to pay a total of about $1.35 billion in criminal and regulatory penalties for bribing Libyan officials and manipulating the London Interbank Offered Rate.