Executive Reminder: Do Not Forget Your HSR Reporting Requirements

The Hart-Scott-Rodino Act requires companies and individuals to report large transactions so the government has time (30 days, or more these days) to investigate any deals before they close. During that time the government can issue a second request, and it’s generally illegal to close a transaction during the investigation.

Failure to comply with these requirements can trigger penalties as high as $43,792 per day. While it can take some time for the Federal Trade Commission or Department of Justice to catch up with you, you do not want to mistake their inactivity, silence, or previous generosity as a free pass. Chances are very good that they will get around to you.


Most executives know all this, but that doesn’t mean they all are on top of compliance.

Capital One Financial Corp. CEO Richard Fairbank just received a $637,950 reminder in the form of a penalty from the FTC. While characterizing him as a “repeat filing offender with wrongdoing spanning two decades,” this is his first penalty. The FTC said Fairbank failed to comply with HSR in 1999 and again in 2004. He claimed these were inadvertent failures and promised to comply going forward. The FTC decided not to fine him.

But he did it again in March 2018 and remained in violation until he took corrective action and observed the 30-day waiting period which ended Jan. 17, 2020. The Commission charged that Fairbank’s multi-million-dollar compensation package included more than 100,000 Capital One shares in 2018, increasing his holdings to $168 million. Fairbank failed to report this windfall to federal antitrust authorities and illegally finalized the acquisition before the agencies could investigate.

The fine is a fraction of Fairbank’s considerable compensation package, but it suggests the government’s commitment to punishing HSR infractions.

“As the CEO of one of America’s largest banks, Richard Fairbank repeatedly broke the law,” said Holly Vedova, Acting Director of the Bureau of Competition. “There is no exemption for Wall Street bankers and powerful CEOs when it comes to complying with our country’s antitrust laws.”

As this case points out, it’s imperative that executives and companies conduct timely HSR reviews and comply with the law’s important reporting requirements.

See our previous blog post: FTC’s HSR Merger Reviews: Expect Delays.

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