According to the FTC, under the Hart-Scott-Rodino Act, Berkshire Hathaway is required to notify the US department of Justice and the FTC of any large transactions that “affect commerce in the US” ahead of the closing of the transaction.
Warren Buffett, Berkshire Hathaway founder, said in a statement: “We made a mistake when we overlooked the filing requirement. Berkshire had owned convertible notes of USG since 2008 and was effectively forced to convert the notes when they were called for redemption by USG in December 2013. This event triggered a filing requirement for Berkshire and we were late in realizing that fact.”
According to the FTC statement, the transgression follows six months after the firm made a “corrective filing” relating to a June 2013 acquisition of $41m of voting securities in Symetra Financial Corporation.
“The FTC took no action against Berkshire Hathaway following its first HSR Act violation, and relied on the firm’s assurances that it would implement appropriate HSR monitoring procedures going forward,” an FTC statement said.
Deborah Feinstein, director of the FTC’s Bureau of Competition, said: “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.”
