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Overseas Reminder

Information that the Department of Justice (DOJ) has made public in the case of Nautilus Hyosung executive Kyoungwon Pyo makes clear that he altered documents related to the Hart-Scott-Rodino (HSR) premerger process to misrepresent information related to competition aspects of the proposed acquisition, presumably to win government clearance of the transaction. The DOJ hasn’t said whether Pyo was aware of the penalties he faced by doing so.

“Foreign companies and executives don’t always have the same familiarity with how seriously we enforce our antitrust laws and the potential consequences,” says Robert Magielnicki, a partner at Sheppard Mullin Richter & Hampton and former associate litigation and antitrust counsel at General Electric Co.

He notes that outside of the U.S., Western Europe, Japan and certain Latin American countries, antitrust and competition laws are still in an evolutionary stage.

“Pyo was someone who certainly did not fully appreciate his obligations under the HSR Act and the potential consequences of his actions,” Magielnicki says. “I would assume this is an isolated event, simply because an experienced executive, especially one familiar with U.S. antitrust laws, probably realizes that filing false documents with the government as part of an official action or investigation carries with it criminal consequences.”

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