Leucadia National To Pay $240K Fine For Violating Antitrust Premerger Report

(RTTNews) - The Justice Department's Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Leucadia National Corp. (LUK) for violating the premerger notification and waiting period requirements of the Hart-Scott-Rodino (HSR) Act of 1976 when it acquired voting securities of KCG Holdings Inc. in July 2013.

At the same time, the department filed a proposed settlement, subject to approval by the court, under which Leucadia has agreed to pay a $240,000 civil penalty to resolve the lawsuit.

The HSR Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements for transactions meeting certain size thresholds so that they can undergo premerger antitrust review. Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice. For a party in violation of the HSR Act, the maximum civil penalty is $16,000 per day.

In July 2013, Knight Capital consolidated with another financial services company, GETCO Holding Company, LLC to become KCG Holdings, Inc. That transaction converted Leucadia's ownership interest in Knight Capital into nearly 16.5 million voting shares of the new entity, KCG Holdings, worth approximately $173 million.

The FTC charged that Leucadia was required by law to report the transaction to U.S. antitrust authorities. Under the Hart-Scott-Rodino Act, parties must notify the FTC and the Department of Justice of large transactions above certain dollar thresholds that affect commerce in the United States and otherwise meet the statutory filing requirements.