Comcast chairman and CEO Brian Roberts has agreed to pay a $500,000 civil penalty to settle charges that he violated federal reporting and waiting requirements in acquiring voting shares of the cable giant between 2007 and 2009, the U.S. Dept, of Justice said Friday.
Roberts apparently failed to file the required notices to the agency after acquiring voting shares by reinvesting dividends and through grants under his existing overall compensation package, according to people familiar with the situation. According to the FTC, Roberts had filed documents in 2002 relating to Comcast's acquisition of AT&T Broadband that gave him the right to acquire additional Comcast voting stock up to Sept. 16, 2007.
The FTC alleges that Roberts violated the notice and waiting requirements beginning in October 2007, when he failed to notify the FTC and DOJ before receiving Comcast voting stock that exceeded HSR Act thresholds. He continued to acquire voting shares through April 2009 without filing the required notifications. In August 2009 Roberts made a corrective filing with the agencies, admitting to previous inadvertent violations of the reporting requirements. He also admitted to two previous inadvertent violations in 1999 and 2000, but was not charged at that time by the FTC, the agency said.
In a statement Comcast and Roberts said that it appreciated the acknowledgement that the violation was inadvertent and technical and "was self-reported, promptly corrected, and did not involve any financial gain to the company or to Mr. Roberts. We take very seriously our obligations to comply with all aspects of the Hart-Scott-Rodino Act and working with our lawyers we have put in place additional safeguards to ensure that an inadvertent violation does not occur in the future."
The Justice Dept, filed suit in U.S. District Court in Washington, D.C., against Roberts, and at the same time filed a proposed settlement that is approved by the court will settle the charges.
According to the FTC, the amount of the fine was limited by a number of factors, " including that the violation was inadvertent and technical; that it was apparently due to faulty advice from outside counsel; that Roberts did not gain financially from the violation; and that he reported the violation promptly once it was discovered."
According to the Justice Dept., the federal court can assess penalties for premerger notification violations before Feb. 10, 2009 of up to $11,000 per day. After that date the fines rise to $16,000 per day.