Justice Department seeks $250 million penalty in KKR premerger case
The Justice Department filed a proposed settlement requiring KKR & Co. GP LLC to pay a $250 million civil penalty over alleged repeated violations of federal premerger filing rules.
The Justice Department filed a proposed settlement on Tuesday that would require KKR & Co. GP LLC to pay a $250 million civil penalty over alleged repeated violations of federal premerger review rules.
The department said the proposed penalty resolves allegations that KKR repeatedly failed to follow the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which requires certain parties to mergers, acquisitions and other covered transactions to file notices before closing. The department said those filings allow the Antitrust Division and the Federal Trade Commission to review deals for possible competition concerns under Section 7 of the Clayton Act.
According to the Justice Department’s press release, the United States alleged KKR evaded antitrust scrutiny in at least 16 transactions. The release said the complaint covered conduct in 2021 and 2022 and alleged that KKR failed to make complete and accurate premerger filings in several ways.
The department said the allegations include altering documents in HSR filings for at least eight transactions, failing to make any HSR filing for at least two transactions and omitting required documents in filings for at least 10 transactions.
The press release described KKR as a private equity firm in the business of buying and selling companies and said the firm was required to make more than 100 premerger filings since 2021. It also identified KKR as a global investment firm headquartered in New York with more than $744 billion in total assets under management.
Associate Attorney General Stanley E. Woodward Jr. said the proposed $250 million civil penalty is historic and “more than 20 times any prior HSR penalty obtained by the DOJ,” according to the release. He said the department is committed to vigorous enforcement of the act and that companies that disregard legal obligations will face serious consequences.
The Justice Department said the HSR Act authorizes civil penalties of more than $50,000 per day per violation. It described the proposed settlement as the largest civil penalty ever assessed for violating the law.
The press release did not detail what happens next beyond the filing of the proposed settlement. The agreement remains proposed, based on the department’s announcement.
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