Not Just A Merger Issue — Compensatory Equity Awards Can Trigger HSR Filing Requirements

The requirements of the Hart-Scott-Rodino Act are well-known in the M&A world, but a recent FTC settlement highlights the serious—and costly—HSR implications for individuals receiving compensatory equity awards.

On December 6, 2018, James Dolan, the CEO of Madison Square Garden Co. (MSG), owner of the New York Knicks and Rangers, agreed to pay $609,810 in civil penalties to resolve allegations by the Federal Trade Commission (FTC) that Mr. Dolan violated the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). The FTC alleged that Mr. Dolan failed to properly notify the FTC and Antitrust Division of the Department of Justice (DOJ), and failed to observe the statutory 30-day waiting period prior to acquiring certain MSG shares granted to him by MSG pursuant to restricted stock unit (RSU) awards.