MEDIA EXECUTIVE PAYS $1.4 MILLION FOR VIOLATING PREMERGER NOTIFICATION REQUIREMENTS
On June 23, 2009, John C. Malone, the chairman of the board of Liberty Media Corporation and the chief executive officer of Discovery Holding Co. (“Discovery”), agreed to pay a penalty of $1.4 million for violating premerger reporting and waiting requirements of the Hart-Scott-Rodino (“HSR”) Act of 1976 when acquiring Discovery.
Mr. Malone violated premerger notification requirements when he began to acquire Discovery voting securities in August 2005 and continued to do so through April 2008. On June 12, 2008, he made a corrective filing for those acquisitions, which triggered a waiting period. However, on June 14, 2008 he made additional acquisitions of Discovery voting securities, when he exercised two options using an escrow arrangement. The escrow arrangement failed to prevent ownership benefits from passing to Mr. Malone and as such Mr. Malone was in violation of the HSR Act. According to the complaint lodged by the Department of Justice’s Antitrust Division, at the request of the Federal Trade Commission, Mr. Malone was in violation of the HSR Act from August 9, 2005 to July 14, 2008.
The HSR Act is an amendment to the Clayton Act and imposes notification and waiting periods on individuals and companies of a certain size before they can complete an acquisition in holding assets over a certain value. In 2005, that amount was $53.1 million. This amount is adjusted annually to reflect changes in gross national product. The amount today is set at $65.2 million.