John Malone hit with $1.4 million civil penalty related to Justice Department lawsuit
As one of Colorado's wealthiest entrepreneurs, Liberty Media chairman John Malone can certainly afford the $1.4 million civil penalty just announced by the U.S. Justice Department. But he can't be pleased by the publicity sure to be generated by the fine, levied against him for violating antitrust pre-merger requirements related to his acquisition of Discovery Holding Co. voting securities back in 2005. The issue's highly technical and plenty complicated. Learn more about it by reading the Department of Justice press release below:
MEDIA EXECUTIVE JOHN MALONE TO PAY $1.4 MILLION CIVIL PENALTY FOR
VIOLATING ANTITRUST PREMERGER NOTIFICATION REQUIREMENTS
Violations Occurred When Malone Purchased Discovery Holding Co. Voting Securities
WASHINGTON -- Media executive John C. Malone will pay a $1.4 million civil penalty to settle charges that he violated premerger reporting and waiting requirements when he acquired Discovery Holding Co. voting securities, the Department of Justice announced today.
The Department's Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Malone for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976. At the same time, the Department filed a proposed settlement that, if approved by the court, will settle the charges.
Malone is Chairman of the Board of Liberty Media Corporation and Chief Executive Officer and Chairman of the Board of Discovery Holding Co., a leading provider of non-fiction television entertainment headquartered in Englewood, Colo.
According to the complaint, Malone failed to comply with the antitrust premerger notification requirements of the HSR Act before acquiring voting securities of Discovery in August 2005, and continued to acquire Discovery voting securities through April 2008. On June 12, 2008, Malone made a corrective filing for the acquisitions of Discovery voting securities. Before the expiration of the waiting period triggered by the June 12, 2008, filing, Malone made additional acquisitions of Discovery voting securities on June 14, 2008, when he exercised two options. Malone exercised these options using an escrow arrangement, but the escrow arrangement did not prevent beneficial ownership of the voting securities from passing to Malone in violation of the Act. The complaint alleges that Malone was in violation of the HSR Act from Aug. 9, 2005, through July 14, 2008.
The Hart-Scott-Rodino Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements on individuals and companies over a certain size before they consummate acquisitions resulting in holding stock or assets above a certain value, which was $53.1 million in August 2005, and with annual adjustments to reflect changes in gross national product is currently $65.2 million.
Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice. For a party in violation of the HSR Act before Feb. 10, 2009, the maximum civil penalty is $11,000 a day for each day it is in violation of the Act. For a party in violation of the HSR Act on or after Feb. 10, 2009, the maximum penalty is $16,000 a day.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss Westword's biggest stories.
- NFL's Marijuana Ban the "Correct Policy," Says Commissioner Roger Goodell
- Reader: I Own a Subaru Outback and I Admit I Can Be an Ass on the Road
- Denver's Ten Best Restaurants for a Great Date Night