(Bloomberg) -- Och-Ziff Capital Management Group, the hedge fund firm run by Daniel Och, more than doubled the money it's setting aside for an anticipated legal settlement with U.S. authorities, leading to a second quarter of losses this year.

The firm reserved $214.3 million for the probe in the second quarter, bringing the total money set aside for a settlement to $414.3 million, the company said Tuesday in a statement. Och-Ziff posted a loss of $184.3 million in distributable earnings, or 35 cents per share. That compares with a profit of $95.2 million, or 18 cents, a year earlier.

The company founded by Och, 55, has been in the cross hairs of investigators for at least five years over whether it knowingly paid bribes to get an investment from Libya's sovereign wealth fund and to participate in deals elsewhere in Africa. The legal woes, coupled with a decline in assets and mediocre performance in the firm's main multistrategy hedge fund, have taken a toll on the company's stock, which has fallen about 71% in the past year.

Chief Financial Officer Joel Frank said on the conference call that settlement talks with the government are in advanced stages.

"While the settlement is still under discussion, we don't expect it to be higher than the amount of the reserve we've taken," Frank said. "Pinpointing the exact timing of the settlement remains difficult, but we are hopeful that we are able to resolve this matter in the nearterm."

Och-Ziff's revenue slowed as assets and fees to managed them dropped. Clients pulled a net $3.1 billion from the firm's funds in the 12 months through June, and an additional $3 billion since then through Aug. 1, bringing assets down to $39.1 billion. That compares to $44.6 billion at the start of the year.

The OZ Master Fund is down 1.7% through July 31, the Asia fund lost 4.3% and a European fund declined about 1%, the company said. The S&P 500 Index returned 7.7% over the period.

CUTS HEADCOUNT

The investigation has weighed on assets, causing many investors "to remain on the sidelines and current LPs to reduce allocations," Amy DeBone, an analyst at Compass Point Research & Trading, wrote in a July 6 report. Once the investigation is resolved, capital inflows to the hedge fund firm will improve, she wrote.

Och-Ziff reduced head count by about 10% this year, and is in talks with some of its managing directors to commit up to $500 million to help pay for the settlement, as well as for general corporate purposes. The company also appointed former Attorney General William Barr to its board, Och-Ziff said.

Excluding the reserve charge, earnings of 6 cents a share missed the 7 cent average of nine analysts in a Bloomberg survey.

The Justice Department is pushing for a guilty plea to criminal charges of bribery while securities regulators are seeking civil sanctions of as much as $400 million from Och-Ziff, the Wall Street Journal reported in April, citing people familiar with the matter.

Och-Ziff said in May that it had entered into settlement talks with authorities, hoped for a conclusion to the investigation by the middle of 2016, and set aside $200 million for a potential legal settlement -- leading to an earnings loss of $142.5 million in the first-quarter.

S&P Global Ratings cut the company's credit rating to BBB last month, citing concerns that the ultimate settlement may exceed what's been reserved and that Och-Ziff's debt load could increase as a result.

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