Leon Black will step down as CEO of Apollo Global Management, the giant private equity company he founded in 1990 and built into a $433 billion financial powerhouse that has become a big lender to corporate America. The announcement came as Apollo revealed the conclusion of a review by law firm Dechert into Black’s relationship with the late paedophile Jeffrey Epstein, which reportedly “cleared” Black and Apollo of any “involvement in criminal activities” with Epstein.
“I have advised the Apollo board that I will retire as C.E.O. on or before my 70th birthday in July and remain as chairman,” Black said in a statement.
Over the past year and a half, Apollo CEO and founder Leon Black had been caught in a web of allegations that he was “too close” to suicided and disgraced pedophile Jeffrey Epstein after it emerged Black had paid Epstein $158 million after he was released from jail. And while Black published a letter in which he admitted that “it was a terrilble mistake” to associated with Epstein and “like many people I respected, I decided to give Epstein a second chance,” Black said last October, it wasn’t nearly enough as some asset managers froze their new capital allocations to Apollo. It eventually prompted Apollo to hire Dechert to conduct an “independent review” of Black’s dealings with Epstein to clear Black’s – and Apollo’s – name.
Well, today after the close, Apollo said the Conflicts Committee completed its independent review of Black’s previous professional relationship with Jeffrey Epstein and publicly released the report which found no evidence that Mr. Black was involved in the criminal activities of the late Epstein, who was indicted in 2019 on federal sex-trafficking charges involving underage girls.
Among the key findings of the Dechert report:
- Apollo never retained Epstein for any services and Epstein never invested in any Apollo-managed funds
- Dechert found no evidence that Black was involved in any way with Epstein’s criminal activities at any time
Black “believed, and witnesses generally agreed, that Epstein provided advice that conferred more than $1 billion and as much as $2 billion or more” in tax savings, the report states, which – needless to say – is ridiculous for a person who was already surrounded by the biggest tax experts on earth who also happened to be Black’s employees.
The report supports Black’s contention that he paid Epstein a fee he believed was roughly equivalent to 5% of the value that late financier generated on an after-tax basis, according to the WSJ. It describes the two men’s relationship deteriorating beginning in 2016 after a fee dispute…. even though Black’s last payment to Epstein was made in April 2017.
Black also asked employees of his family office; attorneys at law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP; and other outside accountants, lawyers and tax professionals to vet and challenge Epstein’s advice when it was given, the report states.
“In short, there is no question that Epstein performed substantive work for Black and that Black genuinely believed that Epstein was extremely smart, capable, and saved him substantial amounts of money,” the report says.
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Author: Tyler Durden