1202002 Informal Interpretation

Date:
Rule:
802.21
Staff:
Michael Verne
Response/Comments:

  – Up to 50% regardless of value.  JJ concurs.

Question

From:

(Redacted)

Sent:

Monday, February 06, 2012 10:57 PM

To:

Verne, B. Michael

Cc:

(Redacted)

Subject:

RE: Question

Mike,

Following up on youre-mail with (redacted) below: Let's say acquiring person X makes twocorrective filings now with respect to the same issuer, one for a pre-2001acquisition at the old 25% threshold (for which the next highest threshold was50%) and another for an acquisition more than 5 years after that at the current$500 million (as adjusted) threshold (at which point X was still over 25% butnot over $1 billion as adjusted). Does the 5-year exemption after theexpiration of the waiting period for the corrective filing apply to bothfilings, such that X doesn't have to file until X gets to 50%? Or does it applyonly to the most recent transaction, such that X would have to file if he makesanother acquisition at a time when he is still over 25% (but under 50%) and hisshares are worth more than $1 billion (as adjusted)?

From: Verne, B. Michael [mailto:MVERNE@ftc.gov]
Sent: Tuesday, January 24,2012 12:14PM
To: (Redacted)
Cc: (Redacted)
Subject: RE: Question

That's right. If you hada violation in 2000, then made another acquisition within five years that didn'tcross a higher threshold, only one corrective filing. But if you made anotheracquisition in 2007 that didn't cross a higher threshold there would be twocorrective filings.

From: (Redacted)
Sent: Tuesday, January 24, 201211:23 AM
To: Verne,B. Michael
Cc: (Redacted)
Subject: Question

Mike:

I'm trying to make surewe understand the application of 802.21 to corrective filings. As I understandit, if we make a corrective filing now for an acquisition that took place in,e.g., 2000, the filing party has five years from the end of the correctivefiling waiting period (Le., until sometime in early 2017) to make additionalacquisitions that don't exceed the next higher threshold that applied in 2000.Is that right? But what about intervening acquisitions that may have occurredafter 2000? I assume an acquisition in 2004 that didn't pass the next higher2000 threshold will be covered by the corrective filing for 2000, but do wehave to do an additional corrective filing for an acquisition in 2007 that alsodidn't pass the next higher threshold but was more than 5 years after the 2000acquisition?

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