'Passive Investor' Lessons From Record HSR Act Settlement

The U.S. Department of Justice announced on July 12, 2016, that ValueAct Capital has agreed to pay $11 million to settle allegations contained in a complaint filed in April of this year in the U.S. District Court for the Northern District of California that ValueAct violated the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The highest fine previously paid for an HSR violation was $5.67 million. ValueAct is an investment firm headquartered in San Francisco that manages over $16 billion on behalf of investors, and frequently acquires minority positions in public companies.

The proposed settlement filed by the DOJ last week, would also specifically enjoin ValueAct from relying on the “investment-only” exemption when it “intends to influence, or is considering influencing, certain basic business decisions, including those relating to merger and acquisition strategy, corporate restructuring, and the company’s pricing, production capacity, or production output.” The settlement is subject to a 60-day notice and comment period, after which the court must enter a final judgment.

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