On April 4, 2016, the Department of Justice (“DOJ”) filed a complaint against certain ValueAct entities (“ValueAct”) for failing to comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”). Specifically, the DOJ alleges that ValueAct improperly relied on the “passive investment exemption” with respect to the acquisition of shares in Baker Hughes Incorporated (“Baker Hughes”) and Halliburton Company (“Halliburton”). The DOJ is seeking a $19 million civil penalty as well as injunctive relief to prevent future HSR violations.

This complaint, together with the DOJ’s enforcement action against ThirdPoint LLC (“ThirdPoint”) in August 2015, signals that the investigation and enforcement of potential violations of the passive investment exemption is a priority for the DOJ as well as the Federal Trade Commission (the “FTC,” and, together with the DOJ, the “agencies”).

Read the full alert.