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From Antitrust Law Daily, April 21, 2017

Settlement with hedge fund investor over HSR Act violation allegations approved

By Jeffrey May, J.D.

The last of three settlements in Hart-Scott-Rodino (HSR) Act cases announced by the federal antitrust agencies in January has been approved by the federal district court in Washington, D.C. Yesterday, the court signed off on a settlement with hedge fund investor Ahmet H. Okumus, who agreed to pay $180,000 in civil penalties to resolve charges that he violated the HSR Act when he acquired voting securities of Group, Inc., in 2016. According to the complaint, Okumus exceeded the filing threshold and failed to file as required when he bought shares of through his hedge fund, Okumus Opportunistic Value Fund, Ltd. He was allegedly in violation from June 27, 2016, when he purchased the shares, to July 14, 2016, when he sold enough shares so that he did not exceed the threshold (U.S. v. Okumus, April 20, 2017, Collyer, R.).

Earlier approvals. The final judgment with Okumus comes after recent approvals of HSR settlements with Duke Energy Corporation and entrepreneur Mitchell P. Rales. The settlement with Duke was approved on April 7. The case was based on the energy company’s agreement to purchase the Osprey Energy Center (a combined-cycle natural-gas-fired electrical generating plant in Auburndale, Florida) from Calpine Corporation. Duke Energy also purportedly entered into a "tolling agreement" that immediately gave Duke Energy control over Osprey’s output and the right to receive the day-to-day profits and losses from Osprey’s business.

According to the complaint filed by the government, Duke Energy took control of Osprey’s business before filing the required HSR notifications and waiting for the expiration of the mandatory waiting period for antitrust review. Under the final judgment, Duke Energy agreed to pay $600,000 in civil penalties to resolve the claims.

Mitchell P. Rales agreed to pay a $720,000 civil penalty under his settlement which was approved on April 12. That settlement resolved allegations that he violated the HSR Act by failing to report purchases of voting securities in Colfax Corporation and Danaher Corporation. The government alleged that Rales had violated that HSR Act by failing to file as required when his wife purchased shares in Colfax in 2011. The shares, which are attributed to Rales under the applicable HSR Rules, were above the filing threshold.

According to the complaint, Rales was in violation of the HSR Act from 2011, when the shares were purchased, to 2016, when he made a corrective filing and observed the waiting period. The government also alleged that, in 2008, Rales violated the HSR Act by buying shares of Danaher that exceeded the filing threshold and by failing to file. Rales was in violation of the HSR Act between 2008, when he bought the shares, and 2016, when he made a corrective filing and observed the waiting period.

The case is No. 1:17-cv-00104.

Attorneys: Companies: Group Inc.; Colfax Corp.; Danaher Corp.; Duke Energy Corp.; Calpine Corp.

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