DOJ brings first criminal charges related to HSR filing

Executive allegedly altered documents submitted to FTC for premerger approval

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) amended U.S. antitrust laws to require preliminary approval by the Federal Trade Commission (FTC) and Department of Justice (DOJ) of mergers and acquisitions of a certain size. It was a response to the difficulty of challenging and remedying transactions that raise competitive issues once the parties have already consummated a deal and begun integrating their operations.

From time to time, companies have run afoul of its rules and faced civil fines, usually because they omitted documents or jumped the gun by proceeding with a transaction before government approval. However, no company or executive had ever faced criminal charges related to HSR filings—until the case of Nautilus Hyosung Inc. (NHI) and the actions of what appears to have been one rogue executive, who now faces a prison sentence.

Corrupting the Process

Given the severity of the punishment it lobbed at Pyo and Nautilus Hyosung, the DOJ is sending a clear message, one that it reiterated in its release announcing the Pyo settlement.

Associate Editor

Melissa Maleske

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