Private equity firms and similar “financial buyers” might think they can sidestep many compliance and reporting requirements because they are, well, private. Yet obligations do exist—and one of the lesser-known pitfalls is the Hart-Scott-Rodino Antitrust Improvements Act.
The Federal Trade Commission, which enforces HSR, made headlines earlier this fall when it nicked a Connecticut hedge-fund manager at Darus Capital Management for $350,000 for failing to report acquisition of voting securities in two U.S. companies. Such enforcement actions are rare, but it did fire a shot across the bow of financial advisers to pay heed to HSR.
