Common Failure to File Scenarios

Although failures to file occur in many different circumstances, the PNO sees two specific scenarios very frequently. 

In the first, company executives exercise a very small number of options or warrants with a value well below the size of transaction threshold, but fail to aggregate the value of the converted shares with what they already hold under 16 CFR 801.13(a) to determine whether a filing is necessary. 

The other common scenario arises when a passive investor, which has relied on the investment only exemption in Section 802.9 of the HSR Rules because it holds 10% or less of the voting shares of the Target, becomes an active investor or increases its holdings in the Target above 10% without filing.