FTC Settles HSR Premerger Reporting Violation Charge Against Barry Diller | Practical Law

FTC Settles HSR Premerger Reporting Violation Charge Against Barry Diller | Practical Law

The Federal Trade Commission announced a settlement with Barry Diller in connection with his acquisitions of shares of The Coca Cola Company beginning in November 2010 and continuing until April 2012. Diller has agreed to pay a $480,000 penalty for his failure to file Hart-Scott-Rodino forms before making these acquisitions.

FTC Settles HSR Premerger Reporting Violation Charge Against Barry Diller

Practical Law Legal Update 6-533-1365 (Approx. 3 pages)

FTC Settles HSR Premerger Reporting Violation Charge Against Barry Diller

by Practical Law Antitrust
Published on 03 Jul 2013 • USA (National/Federal)
The Federal Trade Commission announced a settlement with Barry Diller in connection with his acquisitions of shares of The Coca Cola Company beginning in November 2010 and continuing until April 2012. Diller has agreed to pay a $480,000 penalty for his failure to file Hart-Scott-Rodino forms before making these acquisitions.
On July 2, 2013, the Federal Trade Commission (FTC) announced that investor Barry Diller agreed to pay $480,000 to settle charges that he violated premerger filing requirements under the Hart-Scott-Rodino (HSR) Act. Diller allegedly failed to file HSR forms in connection with acquisitions of voting stock of The Coca Cola Company (Coke) beginning in November 2010 and continuing until April 2012. The complaint filed by the Department of Justice (DOJ) on behalf of the FTC alleged that:
  • Diller failed to file an HSR form to report his November 1, 2010 purchase of shares of Coke that brought the total value of his holdings in Coke above the minimum HSR transaction threshold.
  • Diller also failed to file an HSR form to report his subsequent purchases of shares of Coke that brought the total value of his holdings in Coke above the next-highest HSR transaction threshold.
  • No exemption applied to the acquisitions under the HSR Act.
The HSR Act requires parties to report certain acquisitions of voting securities to the FTC and DOJ before the acquiror purchases the stock where the parties and the transaction meet certain thresholds and no exemption applies. The HSR Act suspends transactions that require reporting, generally 30 days from the time of filing or earlier if the FTC or DOJ terminates the waiting period before expiration.
On May 23, 2012, after in-house counsel for Coke contacted Diller's representatives to ask whether one of the acquisitions was subject to the HSR Act, Diller made the corrective filings. The waiting periods on the filings expired on June 22, 2012. Diller was allegedly in violation of the HSR Act for 599 days, from November 1, 2010 to June 22, 2012. The maximum civil penalty is $16,000 per day. Diller's average daily penalty was about $801.
The DOJ's complaint stated that Diller had previously made a corrective filing to remedy a failure to file for an acquisition of stock of a different corporation. The DOJ did not charge Diller with a violation of the HSR Act in connection with the previous failure to file.
Court documents: