DOJ’s $19 Million Lawsuit Against Activist Investor May Define Scope of Frequently Used Exemption to Antitrust Filings

DOJ’s $19 Million Lawsuit Against Activist Investor May Define Scope of Frequently Used Exemption to Antitrust Filings


By: Bernard (Barry) A. Nigro Jr., Nathaniel L. Asker, Aleksandr B. Livshits

On April 4, 2016, the Antitrust Division of the Department of Justice filed a lawsuit seeking a $19 million fine against activist investor ValueAct Capital for failure to comply with the notification requirements of the Hart-Scott-Rodino Act.  The DOJ alleges that ValueAct did not qualify for the HSR Act's exemption for passive investments in connection with its $2.5 billion investment in Halliburton Company and Baker Hughes Incorporated.  The U.S. antitrust agencies have consistently interpreted the passive investor exemption – also known as the investment-only exemption – narrowly.  If the litigation proceeds, the ValueAct case will be the first time the government's position is tested in court.

 

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