NEW YORK (CelebrityAccess) — The Federal Trade Commission hit Madison Square Garden Executive Chairman James Dolan with civil penalties of $609,810 to resolve allegations that he violated the Hart-Scott-Rodino Act by failing to report acquisition of voting shares of the Madison Square Garden Company.
Under provisions of the Hart-Scott-Rodino Act, companies and individuals must notify the FTC and the Department of Justice of acquisitions that bring their holding of voting securities in a company above a certain threshold and then allow for a waiting period before completing the reported transactions.
According to a complaint the FCC made to the Department of Justice, Dolan violated provisions of the act when he failed to file a notification of acquisition of additional voting securities in Madison Square Garden Company that brought his holdings above the regulatory threshold and then was alleged to have failed to observe the required waiting period before completing the sale.
The complaint further alleges that this was not Dolan’s first time in violating the rule.
Although Dolan made a corrective filing, the FCC alleged that he was not in compliance with regulations starting on Sept. 11, 2017 – when he acquired the additional Madison Square Garden Company voting securities – through Dec. 26, 2017, when the waiting period expired on his corrective filing.
After reviewing the alleged violation, the FTC referred the matter to the Justice Department, who proposed a settlement.
In a statement to CelebrityAccess, a rep for MSGC said:
“Any shareholder whose stockholdings exceed certain thresholds is required to make an HSR filing. Debevoise & Plimpton is the law firm responsible for making timely HSR filings relating to Jim Dolan’s MSG stock. Debevoise inadvertently missed a required HSR filing deadline, for a second time, which resulted in a fine by the FTC. Debevoise agreed to pay the fine as a result of their mistake.”
As well, a clarifying Competitive Impact Statement noted that Dolan did not face the full fury potential fines as the incident appeared to be inadvertent and that he reported the regulatory breach as soon as he learned of it, according to a report in Billboard.