Capital One CEO Allegedly Failed to Report Windfall Transaction to Antitrust Enforcement Agencies

  • The Federal Trade Commission (“FTC”) reached a settlement with Richard Fairbank, CEO of Capital One Financial Corp. (“Capital One”), to resolve allegations that he failed to report a windfall generated by his acquisition of Capital One stock to federal antitrust enforcement agencies in violation of the Hart-Scott-Rodino (“HSR”) Act.
  • The complaint alleged that Fairbank’s did not report his compensation package, which included over 100,000 Capital One shares, to the FTC and the Department of Justice (“DOJ”) as required by the HSR Act in order to allow these agencies to investigate the antitrust aspects of the transaction. The complaint also alleges that the transaction was subject to a 30-day waiting period prior to closing, which Fairbank did not observe. The complaint further alleges that the Fairbank transaction violated the HSR Act even though Fairbank pledged to implement a system that would ensure adherence to HSR Act requirements after he failed to report similar transactions twice before.
  • Under the terms of the proposed final judgment, Fairbank will pay a civil penalty of almost $638,000. The proposed settlement will be published in the Federal Register and will be subject to a 60-day comment period, at the end of which the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.