On August 20, 2014, Berkshire Hathaway Inc. (“Berkshire Hathaway”) settled with the Department of Justice, Antitrust Division (DOJ) and the Federal Trade Commission (FTC) for its failure to comply with the premerger notification requirements and waiting requirements in the Hart- Scott-Rodino (“HSR”) Act of 1976 (“the Act”). As part of the settlement, Berkshire Hathaway agreed to pay $896,000 for failing to report the conversion of notes it owned in building products company USG Corp. (“USG”) into voting securities in December 2013. As a result of the transaction, Berkshire Hathaway’s voting securities in USG were valued at more than $950 million, well above the $283.6 million HSR reporting threshold in effect at the time of the conversion. The swap was therefore subject to the HSR Act’s reporting requirements. According to DOJ’s complaint, this marks the second time in the past two years that Berkshire Hathaway failed to comply with the premerger notification requirements when acquiring voting securities.
The HSR Act requires reporting of non-exempt acquisitions of voting securities or assets that meet certain value thresholds. Failure to comply with the Act’s requirements can result in a maximum civil penalty of $16,000 for each day of the ongoing violation.
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