Third Point LLC Agrees to Pay $600k Penalty Following Accusations

Third Point LLC (Third Point), an investment advisor, and three funds under its control – Third Point Partners Qualified L.P., Third Point Ultra, Ltd., and Third Point Offshore Fund Ltd., which are collectively the Third Point Funds, recently agreed to pay $609,810 to settle allegations that claimed it failed to notify U.S. antitrust agencies about stocks its funds acquired following a merger between Dow Chemical Co. (Dow) and E.I. du Pont de Nemours & Co. (du Pont). The merger created DowDuPont Inc. (DowDuPont).

The merger was introduced in December 2015; the transaction closed on Aug. 31, 2017.

According to court documents, the merger converted Dow shares into DowDuPont shares, of which Third Point received. The Federal Trade Commission (FTC) alleged Third Point violated the premerger notification and waiting period requirements, of the Hart-Scott-Rodino Antitrust Improvements Act (HSR), when shares that three of its funds held in Dow were converted to voting shares in DowDuPont.

“The Hart-Scott-Rodino Antitrust Improvements Act is an essential part of modern antitrust enforcement. It requires the buyer and the seller of voting securities or assets in excess of a certain value to notify the Department of Justice and the Federal Trade Commission and to observe a waiting period prior to consummating the acquisition,” a portion of court documents reads.

According to court documents, the shares were worth approximately $890.6 million in total, each fund’s holdings exceeded the $80.8 million threshold for HSR reporting.

“Although required to do so, each defendant fund failed to file and observe the waiting period prior to acquiring DowDuPont voting securities,” as stated in court documents.

In court documents, the FTC stated Third Point was in violation between Aug. 31, 2017, and Dec. 8, 2017. The U.S. Department of Justice (DOJ) filed a complaint on the FTC’s behalf in late August 2019, with a proposed settlement of $609,810 in civil penalties that Third Point would be responsible for paying.

As a result of the original complaint, Third Point has agreed to pay the settlement amount for the HSR violations.

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