The US Department of Justice announced that John Malone will pay $1.4 million to settle charges that he violated notification rules of the Hart-Scott-Rodino antitrust law related to his acquisition of Discovery Holding Co. voting securities.
Malone is CEO and Chairman of the Board at Discovery, as well as Chairman of Liberty Media.
The DOJ’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit Tuesday in US District Court in Washington, DC, against Malone – at the same time filing a proposed settlement for court approval to settle the charges.
According to the complaint, Malone failed to comply with the antitrust premerger notification requirements of the HSR Act before acquiring voting securities of Discovery in August 2005, and continued to acquire Discovery voting securities through April 2008. On June 12, 2008, Malone made a corrective filing for the acquisitions of Discovery voting securities. Before the expiration of the waiting period triggered by the June 12, 2008, filing, Malone made additional acquisitions of Discovery voting securities on June 14, 2008, when he exercised two options. Malone exercised these options using an escrow arrangement, but the escrow arrangement did not prevent beneficial ownership of the voting securities from passing to Malone in violation of the Act. The complaint alleges that Malone was in violation of the HSR Act from Aug. 9, 2005, through July 14, 2008.