NEW YORK (Reuters) – Leon Black said on Monday he will step down from his position as CEO at Apollo Global Management Inc following the acquisition company’s independent review of its ties to late financier and sex offender Jeffrey Epstein.
The review, conducted by the law firm Dechert LLP, found that Black was not involved in any way in Epstein’s criminal activities. Black, the audit found, paid Epstein bona fide commissions for tax and estate planning advice and other related services.
However, Apollo said it will undertake efforts to strengthen its corporate governance to allow the board to oversee “all aspects” of the acquisition company and delegate less of that work.
Apollo co-founder Marc Rowan will take over as CEO, with Black remaining president of Apollo, the company said.
The sudden demise of Black’s management of Apollo, a New York-based company he co-founded 31 years ago and transformed into one of the world’s largest private equity and credit investment groups, reflects the toll that revelations on His links with Epstein took over the investment firm’s business.
Apollo executives warned in October that some investors had suspended their commitments to Apollo funds pending the results of the review.
Apollo shares have lost a stock market rally and are down 1% since the New York Times reported on Oct.12 that Black paid at least $ 50 million to Epstein for advice and services, when most of his customers had abandoned him. Shares of fellow Blackstone Group Inc, KKR & Co Inc and Carlyle Group Inc were up 19%, 10% and 23% respectively over that period.
The conflict committee of the Apollo board of directors continued the review with Black’s support in October. In a letter to the Apollo fund investors earlier that month, Black said he regretted previous business and social relationships with Epstein, while denying any wrongdoing or inappropriate conduct.
Reporting by Mike Spector; additional reportage by Chibuike Oguh and Jessica DiNapoli in New York; Editing by Dan Grebler