Legal Library: Cases and Proceedings

In December 2007, the Commission challenged ValueAct Capital Partners’ violations of the Hart-Scott-Rodino Pre-Merger Notification Act’s filing requirements related to the acquisition of stock in three companies, Gartner, Inc., Catalina marketing Group, and Acxiom Corp. The firm previously violated the HSR filing requirements in 2003, and after making corrective filings, and agreeing to put HSR safeguards into place to ensure compliance with the filing requirements, the Commission decided to take no action. However, ValueAct failed to enact the necessary preventative measures and again violated the HSR filing requirements with its aforementioned acquisitions resulting in the Commission seeking civil penalties in the amount of $1.1 million.

In 2007, the Commission requested that the Department of Justice file a complaint seeking civil penalties against James D. Dondero for violating the filing requirements of the Hart-Scott-Rodino Pre-Merger Notification Act. A stipulation and proposed final judgment was also filed requiring Dondero, parent of Highland Capital Management, L.P., a hedge fund, to pay $250,000 to settle the charges. According to the Commission, Highland failed to file the appropriate premerger documents in 2003 when it acquired shares of Neighborcare, Inc, then known as Genesis Health Ventures, bringing its holdings above the $50 million filing threshold. Upon realizing the error, a corrective filing was made, and Highland outlined steps to avoid future violations. However, in 2005, Highland reported another such violation involving shares of Motient Corporation.

Valassis, a leading producer of free-standing newspaper inserts in the United States, has settled charges that it violated Section 5 of the FTC Act by attempting to collude with News America Marketing, its only rival, to eliminate competition between the two companies. During a conference call with industry analysts, a Valassis executive invited NewsAmerica to join in a scheme to allocate customers and fix prices in order to end an ongoing price war between the two companies. Under the consent order settling the FTC’s complaint, Valassis is barred from engaging in or inviting collusive agreements with other publishers or attempting to collude with its competitors.