Hart-Scott-Rodino Act: DOJ Enforcement Action Serves As a Reminder that Stock Received as Executive Compensation Can Trigger an HSR Act Filing

Sullivan & Cromwell LLP - December 19, 2011

The Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) have extracted their first publicized penalty for a corporate executive’s failure to make a Hart-Scott-Rodino Act filing before receiving stock of his employer as part of his compensation.

Although the historical background of the enforcement proceeding is somewhat unusual, the proceeding makes clear that the DOJ and FTC will, in appropriate cases, seek penalties against executives who fail to comply with the HSR Act's filing requirements when they receive stock as part of their executive compensation.