Berkshire Hathaway Inc. Agrees to Settle Antitrust Suit for $896,000

Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), the multinational conglomerate controlled by billionaire investor Warren Buffett agreed to pay a penalty of $896,000 to settle the civil antitrust lawsuit related to a stock deal.

Buffett’s conglomerate did not comply with the premerger reporting and waiting requirements when it acquired voting securities of USG Corporation (NYSE:USG), according to the Department of Justice (DOJ) in a statement.

The Federal Trade Commission (FTC) requested the antitrust division of the Justice Department to file a civil antitrust lawsuit against Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) at the United States District Court in Washington, D.C. on Wednesday.

The lawsuit stipulated that Buffett’s conglomerate violated the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976. The law requires companies and investors to notify regulators before entering a merger or stock acquisition that meets a certain size threshold to go through premerger review.

The DOJ also filed a proposed settlement at the same time when it filed the civil antitrust lawsuit with the court. The settlement would resolve the case against Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) if the court approves it.

In December 2013, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) acquired 28% of the voting securities of USG Corporation (NYSE:USG) worth more than $950 million.
Subsequently, Buffett’s conglomerate acknowledged that the transaction should have been reported under the HSR Act in corrective filing with regulators.

A separate statement from the FTC noted that Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) made a similar corrective filing in connection with its acquisition of voting securities of Symetra Financial Corporation (NYSE:SYA) worth $41 million in June 2013. Following the deal, the conglomerate’s holding in Symetra was more than $283.6 million.

At the time, the FTC did not take any action against Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) for its first violation of the HSR Act citing the reason that it “relied on the assurance that it would implement appropriate HSR monitoring going forward.”

“Although we may not seek penalties for every inadvertent error, we will enforce the rules when the same party makes additional mistakes after promises of improved oversight. Companies and individual investors alike should ensure that they have an effective program in place to monitor compliance with HSR filing requirements,” according to Deborah Feinstein, Director, Bureau of Competition of the FTC.