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Notice2024-21943

United States v. Ryan Cohen; Proposed Final Judgment and Competitive Impact Statement

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Published

September 25, 2024

Issuing agencies

Justice DepartmentAntitrust Division

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<title>Federal Register, Volume 89 Issue 186 (Wednesday, September 25, 2024)</title>
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[Federal Register Volume 89, Number 186 (Wednesday, September 25, 2024)]
[Notices]
[Pages 78330-78336]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-21943]

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DEPARTMENT OF JUSTICE

Antitrust Division

United States v. Ryan Cohen; Proposed Final Judgment and
Competitive Impact Statement

Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act,

[[Page 78331]]

15 U.S.C. 16(b)-(h), that a proposed Final Judgment, Stipulation, and
Competitive Impact Statement have been filed with the United States
District Court for the District of Columbia in United States of America
v. Ryan Cohen, Civil Action 1:24-CV-02670. On September 18, 2024, the
United States filed a Complaint alleging that Ryan Cohen violated the
premerger notification and waiting period requirements of the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a, in
connection with the acquisition of voting securities of Wells Fargo &
Company. The proposed Final Judgment, filed at the same time as the
Complaint, requires Ryan Cohen to pay a civil penalty of $985,320.
Copies of the Complaint, proposed Final Judgment, and Competitive
Impact Statement are available for inspection on the Antitrust
Division's website at <a href="http://www.justice.gov/atr">http://www.justice.gov/atr</a> and at the Office of
the Clerk of the United States District Court for the District of
Columbia. Copies of these materials may be obtained from the Antitrust
Division upon request and payment of the copying fee set by Department
of Justice regulations.
Public comment is invited within 60 days of the date of this
notice. Such comments, including the name of the submitter, and
responses thereto, will be posted on the Antitrust Division's website,
filed with the Court, and, under certain circumstances, published in
the Federal Register. Comments in English should be directed to
Maribeth Petrizzi, Special Attorney, United States, c/o Federal Trade
Commission, 600 Pennsylvania Avenue NW, CC-8416, Washington, DC 20580
or by email to <a href="/cdn-cgi/l/email-protection#016362626e6c716d68606f6264416775622f666e77"><span class="__cf_email__" data-cfemail="482a2b2b272538242129262b2d082e3c2b662f273e">[email&#160;protected]</span></a>.

Suzanne Morris,
Deputy Director of Civil Enforcement Operations.

United States District Court for the District of Columbia

United States of America, c/o Department of Justice, Washington,
DC 20530, Plaintiff, v. Ryan Cohen, c/o RC Ventures, LLC, P.O. Box
25250, PMB 30427, Miami, FL 33102, Defendant.

Civil Action No.

Complaint for Civil Penalties for Failure To Comply With the Premerger
Reporting and Waiting Requirements of the Hart-Scott Rodino Act

The United States of America, acting under the direction of the
Attorney General of the United States and at the request of the United
States Federal Trade Commission, brings this civil antitrust action to
obtain monetary relief in the form of civil penalties against Defendant
Ryan Cohen (``Cohen''). The United States alleges as follows:

I. Nature of the Action

1. Cohen violated the notice and waiting period requirements of
Section 7A of the Clayton Act, 15 U.S.C. 18a, commonly known as the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (``HSR Act'' or
``Act''), in March 2018 when he acquired voting securities of Wells
Fargo & Company (``Wells Fargo'') in excess of the threshold for filing
established by the HSR Act.

II. Jurisdiction and Venue

2. This Court has jurisdiction over the subject matter of this
action pursuant to Section 7A(g) of the Clayton Act, 15 U.S.C. 18a(g),
and 28 U.S.C. 1331, 1337(a), 1345, and 1355, and over Defendant by
virtue of Defendant's consent in the Stipulation relating hereto, to
the maintenance of this action and entry of the Final Judgment in this
District.
3. Venue is proper in this District by virtue of Defendant's
consent in the Stipulation relating hereto, to the maintenance of this
action and entry of the Final Judgment in this District.

III. The Defendant

4. Defendant Cohen is a natural person with his principal office
and place of business at RC Ventures, LLC, P.O. Box 25250, PMB 30427,
Miami, FL 33102. Cohen is an entrepreneur and is the managing member of
RC Ventures, LLC. Cohen is engaged in commerce, or in activities
affecting commerce, within the meaning of Section 1 of the Clayton Act,
15 U.S.C. 12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C.
18a(a)(1). At all times relevant to this complaint, Cohen had sales or
assets that met the operative threshold.

IV. Other Entity

5. Wells Fargo & Company is a corporation organized under the laws
of Delaware with its principal place of business at 420 Montgomery
Street, San Francisco, CA 94104. Wells Fargo is engaged in commerce, or
in activities affecting commerce, within the meaning of Section 1 of
the Clayton Act, 15 U.S.C. 12, and Section 7A(a)(1) of the Clayton Act,
15 U.S.C. 18a(a)(1). At all times relevant to this complaint, Wells
Fargo had sales or assets that met the operative threshold.

V. The Hart-Scott-Rodino Act and Rules

6. The HSR Act requires certain acquiring persons and certain
persons whose voting securities or assets are acquired to file
notifications with the Department of Justice and the Federal Trade
Commission (collectively, the ``federal antitrust agencies'') and to
observe a waiting period before consummating certain acquisitions of
voting securities or assets. 15 U.S.C. 18a(a) and (b). These
notification and waiting period requirements apply to acquisitions that
meet the HSR Act's size of transaction and size of person thresholds,
which have been adjusted annually since 2004. The size of transaction
threshold is met for transactions valued over $50 million, as adjusted
($84.4 million in 2018). In addition, there is a separate filing
requirement for transactions in which the acquirer will hold voting
securities in excess of $100 million, as adjusted ($168.8 million in
2018). With respect to the size of person thresholds, the HSR Act
requires one person involved in the transaction to have sales or assets
in excess of $10 million, as adjusted ($16.9 million in 2018), and the
other person to have sales or assets in excess of $100 million, as
adjusted ($168.8 million in 2018).
7. The HSR Act's notification and waiting period requirements are
intended to give the federal antitrust agencies prior notice of, and
information about, proposed transactions. The waiting period is also
intended to provide the federal antitrust agencies with the opportunity
to investigate a proposed transaction and to determine whether to seek
an injunction to prevent the consummation of a transaction that may
violate the antitrust laws.
8. At all times relevant to this complaint, the HSR Act required,
inter alia, an acquirer who meets the operative threshold who, as a
result of an acquisition, would hold voting securities in excess of a
relevant filing threshold of an issuer who also meets the operative
threshold, to file premerger notification and report forms with the
federal antitrust agencies and to observe the required waiting period
before making the acquisition, unless otherwise exempted.
9. As codified in 15 U.S.C. 18a(c)(9), the Act exempts from the
requirements of the HSR Act acquisitions of voting securities ``solely
for the purpose of investment'' if, as a result of the acquisition, the
securities held do not exceed 10 percent of the outstanding voting
securities of the issuer.
10. Pursuant to Section (d)(2) of the HSR Act, 15 U.S.C. 18a(d)(2),
rules were promulgated to carry out the purposes of the HSR Act. 16 CFR
801-03 (``HSR Rules''). The HSR Rules, among other things, define terms
contained in the HSR Act.

[[Page 78332]]

11. Section 801.1(i)(1) of the HSR Rules, 16 CFR 801.1(i)(1),
defines the term ``solely for the purpose of investment'' as follows:

Voting securities are held or acquired ``solely for the purpose
of investment'' if the person holding or acquiring such voting
securities has no intention of participating in the formulation,
determination, or direction of the basic business decisions of the
issuer.

12. Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1),
provides that any person, or any officer, director, or partner thereof,
who fails to comply with any provision of the HSR Act is liable to the
United States for a civil penalty for each day during which such person
is in violation. Pursuant to the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015, Public Law 114-74, 701
(further amending the Federal Civil Penalties Inflation Adjustment Act
of 1990), the dollar amounts of civil penalties listed in Federal Trade
Commission Rule 1.98, 16 CFR 1.98, are adjusted annually for inflation;
the maximum amount of civil penalty in effect at the time of Cohen's
corrective filing was $43,792 per day. 86 FR 2541 (January 13, 2021).

VI. Defendant's Violation of the HSR Act

13. Beginning in June 2016, Cohen made periodic acquisitions of
Wells Fargo voting securities.
14. On February 5, 2018, Cohen emailed Wells Fargo's CEO to advise
him of the contributions he could make to Wells Fargo should he become
a member of the Board of Directors. Cohen also made suggestions on how
Wells Fargo could improve its operations, such as improving its
technology and mobile app. Cohen proceeded to have periodic
communications with Wells Fargo's leadership regarding suggestions to
improve Wells Fargo's business and to advocate for a potential board
seat through at least April 2020.
15. On March 22, 2018, Cohen acquired 562,077 voting securities in
Wells Fargo in the open market, which resulted in his aggregated
holdings of Wells Fargo voting securities exceeding the $100 million
threshold, as adjusted, which in March 2018, was $168.8 million.
16. Cohen's acquisitions of Wells Fargo voting securities described
in Paragraph 15 above were not exempt under the HSR Act's ``solely for
the purpose of investment'' exemption. Although Cohen's holdings of
Wells Fargo voting securities did not exceed 10 percent of the
outstanding voting securities, Cohen's intent when he made the March
22, 2018, acquisitions of Wells Fargo voting securities was to
participate ``in the formulation, determination, or direction of the
basic business decisions'' of Wells Fargo, as evidenced, inter alia, by
Cohen's email on February 5, 2018, wherein he advocated to join the
Wells Fargo's board as described in Paragraph 14.
17. Although required to do so, Cohen did not file anything under
the HSR Act or observe the HSR Act's waiting period prior to completing
the March 22, 2018, transaction.
18. From March 22, 2018, through September 2, 2020, Cohen continued
to acquire Wells Fargo voting securities through open market purchases,
and in twenty instances those acquisitions exceeded 100,000 shares. For
example, Cohen acquired: 350,000 voting securities on August 14, 2019;
354,131 voting securities on March 10, 2020; 366,316 voting securities
on July 20, 2020; and 500,000 voting securities on August 5, 2020.
19. All these acquisitions described in Paragraph 18 were made on
the open market. Open market acquisitions require an acquirer to decide
affirmatively and actively to acquire voting securities; given the
scope of Cohen's open market acquisitions, it was not excusable
negligence for him to be unaware of HSR Act legal requirements.
20. On January 14, 2021, Cohen made a corrective filing under the
HSR Act for the acquisition he made on March 22, 2018. That acquisition
resulted in Cohen's aggregated holdings of Wells Fargo voting
securities exceeding the $100 million threshold, as adjusted.
21. Cohen was in continuous violation of the HSR Act from March 22,
2018, when he acquired the Wells Fargo voting securities valued in
excess of the HSR Act's $100 million filing threshold, as adjusted,
through February 16, 2021, when the waiting period expired on his
corrective filing.

VII. Requested Relief

Wherefore, the United States requests:
a. that the Court adjudge and decree that Defendant's acquisitions
of Wells Fargo voting securities from March 22, 2018, through September
2, 2020, were violations of the HSR Act, 15 U.S.C. 18a; and that
Defendant was in violation of the HSR Act each day from March 22, 2018,
through February 16, 2021;
b. that the Court order Defendant to pay to the United States an
appropriate civil penalty as provided by the Section 7A(g)(1) of the
Clayton Act, 15 U.S.C. 18a(g)(1), the Debt Collection Improvement Act
of 1996, Public Law 104-134, 31001(s) (amending the Federal Civil
Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461), and the
Federal Civil Penalties Inflation Adjustment Act Improvements Act of
2015, Public Law 114-74, 701 (further amending the Federal Civil
Penalties Inflation Adjustment Act of 1990), and Federal Trade
Commission Rule 1.98, 16 CFR 1.98, 86 FR 2541 (January 13, 2021);
c. that the Court order such other and further relief as the Court
may deem just and proper; and
d. that the Court award the United States its costs of this suit.

Dated: September 18, 2024.

For the Plaintiff United States of America:
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Jonathan Kanter,

Assistant Attorney General, Department of Justice, Antitrust
Division, Washington, DC 20530.
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Maribeth Petrizzi,

DC Bar No. 435204, Special Attorney.
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Kenneth A. Libby,

Special Attorney.
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Jennifer Lee,

Special Attorney.
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Danielle Sims,

DC Bar No. 982506, Special Attorney.

Federal Trade Commission, Washington, DC 20580, (202) 326-2694.

United States District Court for the District of Columbia

United States of America, Plaintiff, v. Ryan Cohen, Defendant.

Civil Action No.

[Proposed] Final Judgment

Whereas the United States of America filed its Complaint on
September 18, 2024, alleging that Defendant Ryan Cohen violated Section
7A of the Clayton Act (15 U.S.C. 18a, commonly known as the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the ``HSR Act''));
And whereas the United States and Defendant have consented to the
entry of this Final Judgment without the taking of testimony, without
trial or adjudication of any issue of fact or law, and without this
Final Judgment constituting any evidence against or admission by any
party regarding any issue of fact or law;
Now, therefore, it is ordered, adjudged, and decreed:

I. Jurisdiction

The Court has jurisdiction over the subject matter of and each of
the parties to this action. The Complaint states a claim upon which
relief can be granted

[[Page 78333]]

against Defendant under Section 7A of the Clayton Act, 15 U.S.C. 18a.

II. Civil Penalty

Judgment is hereby entered in this matter in favor of the United
States and against Defendant, and, pursuant to Section 7A(g)(1) of the
Clayton Act, 15 U.S.C. 18a(g)(1), the Debt Collection Improvement Act
of 1996, Public Law 104-134, 31001(s) (amending the Federal Civil
Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461), the
Federal Civil Penalties Inflation Adjustment Act Improvements Act of
2015, Public Law 114-74, 701 (further amending the Federal Civil
Penalties Inflation Adjustment Act of 1990), and Federal Trade
Commission Rule 1.98, 16 CFR 1.98, 87 FR 1070 (January 10, 2022),
Defendant is hereby ordered to pay a civil penalty in the amount of
nine hundred eighty-five thousand three hundred and twenty dollars
($985,320). Payment of the civil penalty ordered hereby must be made by
wire transfer of funds or cashier's check. If the payment is to be made
by wire transfer, prior to making the transfer, Defendant will contact
the Budget and Fiscal Section of the Antitrust Division's Executive
Office at <a href="/cdn-cgi/l/email-protection#551401077b100d1a78133c26363439781c3b24203c273c3026152026313a3f7b323a23"><span class="__cf_email__" data-cfemail="8bcadfd9a5ced3c4a6cde2f8e8eae7a6c2e5fafee2f9e2eef8cbfef8efe4e1a5ece4fd">[email&#160;protected]</span></a> for instructions. If the
payment is made by cashier's check, the check must be made payable to
the United States Department of Justice--Antitrust Division and
delivered to: Chief, Budget & Fiscal Section, Executive Office,
Antitrust Division, United States Department of Justice, Liberty Square
Building, 450 5th Street NW, Room 3016, Washington, DC 20530
Defendant must pay the full amount of the civil penalty within
thirty (30) days of entry of this Final Judgment. In the event of a
default or delay in payment, interest at the rate of eighteen percent
(18%) per annum will accrue thereon from the date of the default or
delay to the date of payment.

III. Costs

Each party will bear its own costs of this action, except as
otherwise provided in Paragraph IV.C.

IV. Enforcement of Final Judgment

A. The United States retains and reserves all rights to enforce the
provisions of this Final Judgment, including the right to seek an order
of contempt from the Court. Defendant agrees that in a civil contempt
action, a motion to show cause, or a similar action brought by the
United States regarding an alleged violation of this Final Judgment,
the United States may establish a violation of this Final Judgment and
the appropriateness of a remedy therefor by a preponderance of the
evidence, and Defendant waives any argument that a different standard
of proof should apply.
B. Defendant agrees that he may be held in contempt of, and that
the Court may enforce, any provision of this Final Judgment that is
stated specifically and in reasonable detail, whether or not it is
clear and unambiguous on its face. The terms of this Final Judgment
should not be construed against either party as the drafter.
C. In connection with a successful effort by the United States to
enforce this Final Judgment against Defendant, whether litigated or
resolved before litigation, Defendant agrees to reimburse the United
States for the fees and expenses of its attorneys, as well as all other
costs including experts' fees, incurred in connection with that
enforcement effort, including in the investigation of the potential
violation.

v. Expiration of Final Judgment

This Final Judgment will expire upon payment in full by the
Defendant of the civil penalty required by Section II of this Final
Judgment.

VI. Public Interest Determination

Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16, including making copies available to the
public of this Final Judgment, the Competitive Impact Statement, and
any comments thereon and the United States' responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.

Dated:-----------------------------------------------------------------

[Court approval subject to the procedures of the Antitrust
Procedures and Penalties Act, 15 U.S.C. 16]
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United States District Judge

United States District Court for the District of Columbia

United States of America, Plaintiff, v. Ryan Cohen, Defendant.

Civil Action No.

Competitive Impact Statement

The United States of America (``United States''), under Section
2(b) of the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h)
(``APPA'' or ``Tunney Act''), files this Competitive Impact Statement
relating to the proposed Final Judgment submitted for entry in this
civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

On September 18, 2024, the United States filed a Complaint against
Defendant Ryan Cohen (``Cohen'' or ``Defendant''), relating to Cohen's
acquisitions of voting securities of Wells Fargo & Company (``WF'')
from March 2018 through September 2020. The Complaint alleges that
Cohen violated Section 7A of the Clayton Act, 15 U.S.C. 18a, commonly
known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
``HSR Act''). The HSR Act requires certain acquiring persons and
certain persons whose voting securities or assets are acquired to file
notifications with the Department of Justice and the Federal Trade
Commission (collectively, the ``federal antitrust agencies'') and to
observe a waiting period before consummating certain acquisitions of
voting securities or assets. 15 U.S.C. 18a(a) and (b).
These notification and waiting period requirements apply to
acquisitions that meet the HSR Act's size of transaction and size of
person thresholds, which have been adjusted annually since 2004. The
size of transaction threshold is met for transactions valued over $50
million, as adjusted ($84.4 million in 2018). In addition, there is a
separate filing requirement for transactions in which the acquirer will
hold voting securities in excess of $100 million, as adjusted ($168.8
million in 2018).
With respect to the size of person thresholds, the HSR Act requires
one person involved in the transaction to have sales or assets in
excess of $10 million, as adjusted ($16.9 million in 2018), and the
other person to have sales or assets in excess of $100 million, as
adjusted ($168.8 million in 2018). A key purpose of the notification
and waiting period requirements is to protect consumers and competition
from potentially anticompetitive transactions by providing the federal
antitrust agencies an opportunity to conduct an antitrust review of
proposed transactions before they are consummated.
An exemption from HSR Act filings may apply under certain
circumstances. Section (c)(9) of the HSR Act, 15 U.S.C. 18a(c)(9),
exempts from the requirements of the HSR Act acquisitions of voting
securities ``solely for the purpose of investment'' if, as a result of
the acquisition, the securities held do not exceed 10 percent of the
outstanding voting securities of the issuer. Section 801.1(i)(1) of the
HSR Rules, 16 CFR 801.1(i)(1), defines the

[[Page 78334]]

term ``solely for the purpose of investment'' as follows:

The Complaint alleges that Cohen acquired voting securities of WF
without filing the required pre-acquisition HSR Act notifications with
the federal antitrust agencies and without observing the waiting
period. Cohen's acquisitions of WF voting securities exceeded the $100-
million statutory threshold, as adjusted, and Cohen and WF met the
then-applicable adjusted statutory size of person thresholds. Moreover,
none of Cohen's acquisitions were exempt from HSR Act notification and
waiting period requirements under the Investment-Only Exemption.
At the same time the Complaint was filed in the present action, the
United States also filed a Stipulation and Order and proposed Final
Judgment that resolve the allegations made in the Complaint. The
proposed Final Judgment is designed to address the violation alleged in
the Complaint and penalize Cohen's HSR Act violations. Under the
proposed Final Judgment, Cohen must pay a civil penalty to the United
States in the amount of $985,320.
The United States and Cohen have stipulated that the proposed Final
Judgment may be entered after compliance with the APPA, unless the
United States first withdraws its consent. Entry of the proposed Final
Judgment will terminate this action, except that the Court will retain
jurisdiction to construe, modify, or enforce the provisions of the
proposed Final Judgment and punish violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

The crux of Cohen's violation is that he failed to submit HSR Act
notifications even though his acquisitions of WF voting securities
satisfied the HSR Act filing requirements and he was not eligible to
take advantage of the Investment-Only Exemption. At all times relevant
to the Complaint, Cohen had sales or assets in excess of $10 million,
as adjusted. At all times relevant to the Complaint, WF had sales or
assets in excess of $100 million, as adjusted.
Cohen is an entrepreneur and the managing partner of RC Ventures,
LLC, a venture capital fund. Cohen previously founded the e-commerce
company Chewy, Inc., in 2011, and was its CEO until 2018. Cohen is now
the Chairman of GameStop Corp.
Beginning in June 2016, Cohen made periodic acquisitions of WF
voting securities. On February 5, 2018, Cohen emailed WF's CEO to
suggest improvements to WF's business operations and to advocate for a
board seat. On March 22, 2018, Cohen acquired 562,077 WF voting
securities via the open market, which resulted in his aggregated
holdings to exceed the $100 million threshold, as adjusted, which in
March 2018, was $168.8 million.
Cohen's March 22, 2018, acquisitions of WF voting securities were
not exempt under the Investment-Only Exemption. Cohen's intent when he
made the March 22, 2018, acquisitions of WF voting securities was to
participate ``in the formulation, determination, or direction of the
basic business decisions'' of WF as evidenced by Cohen's email on
February 5, 2018, when he advocated for a board seat. Although required
to do so, Cohen did not file under the HSR Act or observe the HSR Act's
waiting period prior to completing the March 22, 2018, transaction.
Cohen proceeded to have periodic communications with WF's leadership
regarding suggestions to improve WF's business and to advocate for a
potential board seat through at least April 2020.
From March 22, 2018, through September 2, 2020, Cohen continued to
acquire WF voting securities through open market purchases, and in
twenty instances those acquisitions exceeded 100,000 shares. For
example, Cohen acquired 350,000 voting securities on August 14, 2019;
354,131 voting securities on March 10, 2020; 366,316 voting securities
on July 20, 2020; and 500,000 voting securities on August 5, 2020. All
of these acquisitions were made on the open market. Open market
acquisitions require an acquirer to affirmatively and actively decide
to acquire voting securities; in particular for very large open market
acquisitions, it is not excusable negligence to be unaware of HSR Act
legal requirements.
On January 14, 2021, Cohen made a corrective filing under the HSR
Act for the acquisition he made on March 22, 2018, which resulted in
Cohen's aggregated holdings of WF voting securities to exceed the $100
million threshold, as adjusted. Cohen was in continuous violation of
the HSR Act from March 22, 2018, when he acquired the WF voting
securities valued in excess of the HSR Act's $100 million filing
threshold, as adjusted, through February 16, 2021, when the waiting
period expired on his corrective filing.

III. Explanation of the Proposed Final Judgment

The proposed Final Judgment imposes a $985,320 civil penalty
designed to address the violation alleged in the Complaint, penalize
the Defendant, and deter others from violating the HSR Act. The United
States adjusted the penalty downward from the maximum permitted under
the HSR Act because the violation was inadvertent and the Defendant is
willing to resolve the matter by proposed final judgment and thereby
avoid prolonged investigation and litigation. However, the penalty
amount reflects that Defendant was seeking a board seat during the
period in which he was making acquisitions of WF voting securities and
could no longer rely on the Investment-Only Exemption. In addition,
many of these acquisitions were large, open market acquisitions, such
that he should have been aware of his obligations under the HSR Act.
Open market acquisitions require an acquirer to affirmatively and
actively decide to acquire voting securities; in particular for very
large open market acquisitions, it is not excusable negligence to be
unaware of HSR Act legal requirements. The penalty will not have any
adverse effect on competition; instead, the relief should have a
beneficial effect on competition because it will deter the Defendant
and others from failing to properly notify the federal antitrust
agencies of future acquisitions, in accordance with the law.

IV. Remedies Available to Potential Private Litigants

There is no private antitrust action for HSR Act violations;
therefore, entry of the proposed Final Judgment will neither impair nor
assist the bringing of any private antitrust action.

V. Procedures Available for Modification of the Proposed Final Judgment

The United States and the Defendant have stipulated that the
proposed Final Judgment may be entered by the Court after compliance
with the provisions of the APPA, provided that the United States has
not withdrawn its consent. The APPA conditions entry upon the Court's
determination that the proposed Final Judgment is in the public
interest.
The APPA provides a period of at least 60 days preceding the
effective date of the proposed Final Judgment within which any person
may submit to the United States written comments

[[Page 78335]]

regarding the proposed Final Judgment. Any person who wishes to comment
should do so within 60 days of the date of publication of this
Competitive Impact Statement in the Federal Register or the last date
of publication in a newspaper of the summary of this Competitive Impact
Statement, whichever is later. All comments received during this period
will be considered by the United States, which remains free to withdraw
its consent to the proposed Final Judgment at any time before the
Court's entry of the Final Judgment. The comments and the response of
the United States will be filed with the Court. In addition, the
comments and the United States' responses will be published in the
Federal Register unless the Court agrees that the United States instead
may publish them on the U.S. Department of Justice, Antitrust
Division's internet website. Written comments should be submitted in
English to: Maribeth Petrizzi, Special Attorney, United States, c/o
Federal Trade Commission, 600 Pennsylvania Avenue NW, CC-8416,
Washington, DC 20580, Email: <a href="/cdn-cgi/l/email-protection#95f7f6f6faf8e5f9fcf4fbf6f0d5f3e1f6bbf2fae3"><span class="__cf_email__" data-cfemail="197b7a7a767469757078777a7c597f6d7a377e766f">[email&#160;protected]</span></a>.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits against the Defendant. The
United States is satisfied, however, that the proposed relief is an
appropriate remedy in this matter. Given the facts of this case,
including the Defendant's self-reporting of the violations and
willingness to promptly settle this matter, the United States is
satisfied that the proposed civil penalty is sufficient to address the
violations alleged in the Complaint and to deter violations by
similarly situated entities in the future, without the time, expense,
and uncertainty of a full trial on the merits.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

Under the Clayton Act and APPA, proposed Final Judgments or
``consent decrees'' in antitrust cases brought by the United States are
subject to a 60-day comment period, after which the Court shall
determine whether entry of the proposed Final Judgment ``is in the
public interest.'' 15 U.S.C. 16(e)(1). In making that determination,
the Court, in accordance with the statute as amended in 2004, is
required to consider:

(A) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
(B) the impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors,
the Court's inquiry is necessarily a limited one as the government is
entitled to ``broad discretion to settle with the defendant within the
reaches of the public interest.'' United States v. Microsoft Corp., 56
F.3d 1448, 1461 (D.C. Cir. 1995); United States v. U.S. Airways Grp.,
Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the
``court's inquiry is limited'' in Tunney Act settlements); United
States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 U.S. Dist. LEXIS
84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a court's review of a
proposed Final Judgment is limited and only inquires ``into whether the
government's determination that the proposed remedies will cure the
antitrust violations alleged in the complaint was reasonable, and
whether the mechanism to enforce the final judgment are clear and
manageable'').
As the U.S. Court of Appeals for the District of Columbia Circuit
has held, under the APPA a court considers, among other things, the
relationship between the remedy secured and the specific allegations in
the government's complaint, whether the proposed Final Judgment is
sufficiently clear, whether its enforcement mechanisms are sufficient,
and whether it may positively harm third parties. See Microsoft, 56
F.3d at 1458-62. With respect to the adequacy of the relief secured by
the proposed Final Judgment, a court may not ``make de novo
determination of facts and issues.'' United States v. W. Elec. Co., 993
F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also
Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F.
Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F.
Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, at
*3. Instead, ``[t]he balancing of competing social and political
interests affected by a proposed antitrust consent decree must be left,
in the first instance, to the discretion of the Attorney General.'' W.
Elec. Co., 993 F.2d at 1577 (quotation marks omitted). ``The court
should bear in mind the flexibility of the public interest inquiry: the
court's function is not to determine whether the resulting array of
rights and liabilities is one that will best serve society, but only to
confirm that the resulting settlement is within the reaches of the
public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks
omitted); see also United States v. Deutsche Telekom AG, No. 19-2232
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding
requirements would ``have enormous practical consequences for the
government's ability to negotiate future settlements,'' contrary to
congressional intent. Microsoft, 56 F.3d at 1456. ``The Tunney Act was
not intended to create a disincentive to the use of the consent
decree.'' Id.
The United States' predictions about the efficacy of the remedy are
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at
1461 (recognizing courts should give ``due respect to the Justice
Department's . . . view of the nature of its case''); United States v.
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In
evaluating objections to settlement agreements under the Tunney Act, a
court must be mindful that [t]he government need not prove that the
settlements will perfectly remedy the alleged antitrust harms[;] it
need only provide a factual basis for concluding that the settlements
are reasonably adequate remedies for the alleged harms.'' (internal
citations omitted)); United States v. Republic Servs., Inc., 723 F.
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to
which the government's proposed remedy is accorded''); United States v.
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A
district court must accord due respect to the government's prediction
as to the effect of proposed remedies, its perception of the market
structure, and its view of the nature of the case.''). The ultimate
question is whether ``the remedies [obtained by the Final Judgment are]
so inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest.''' Microsoft, 56 F.3d at 1461 (quoting
W. Elec. Co., 900 F.2d at 309).
Moreover, the Court's role under the APPA is limited to reviewing
the remedy in relationship to the violations that the United States has
alleged in its complaint and does not authorize the

[[Page 78336]]

Court to ``construct [its] own hypothetical case and then evaluate the
decree against that case.'' Microsoft, 56 F.3d at 1459; see also U.S.
Airways, 38 F. Supp. 3d at 75 (noting that the court must simply
determine whether there is a factual foundation for the government's
decisions such that its conclusions regarding the proposed settlements
are reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he
`public interest' is not to be measured by comparing the violations
alleged in the complaint against those the court believes could have,
or even should have, been alleged.''). Because the ``court's authority
to review the decree depends entirely on the government's exercising
its prosecutorial discretion by bringing a case in the first place,''
it follows that ``the court is only authorized to review the decree
itself,'' and not to ``effectively redraft the complaint'' to inquire
into other matters that the United States did not pursue. Microsoft, 56
F.3d at 1459-60.
In its 2004 amendments to the APPA, Congress made clear its intent
to preserve the practical benefits of using judgments proposed by the
United States in antitrust enforcement, Pub. L. 108-237 Sec. 221, and
added the unambiguous instruction that ``[n]othing in this section
shall be construed to require the court to conduct an evidentiary
hearing or to require the court to permit anyone to intervene.'' 15
U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d at 76
(indicating that a court is not required to hold an evidentiary hearing
or to permit intervenors as part of its review under the Tunney Act).
This language explicitly wrote into the statute what Congress intended
when it first enacted the Tunney Act in 1974. As Senator Tunney
explained: ``[t]he court is nowhere compelled to go to trial or to
engage in extended proceedings which might have the effect of vitiating
the benefits of prompt and less costly settlement through the consent
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Sen.
Tunney). ``A court can make its public interest determination based on
the competitive impact statement and response to public comments
alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F.
Supp. 2d at 17).

VIII. Determinative Documents

There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.

Dated: September 18, 2024.

Respectfully submitted,

-----------------------------------------------------------------------

Kenneth A. Libby,

Special Attorney, U.S. Department of Justice, Antitrust Division, c/
o Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington,
DC 20580, Phone: (202) 326-2694, Email: <a href="/cdn-cgi/l/email-protection#274c4b4e45455e6741534409404851"><span class="__cf_email__" data-cfemail="a7cccbcec5c5dee7c1d3c489c0c8d1">[email&#160;protected]</span></a>.

[FR Doc. 2024-21943 Filed 9-24-24; 8:45 am]
BILLING CODE 6750-01-P

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