Fried Frank discusses FTC Challenges Reliance on “Investment-Only” Exemption

This week, the Federal Trade Commission announced a settlement of charges that Third Point, a well-known activist investor, improperly relied on the “investment-only” exemption to the reporting obligations under the Hart-Scott-Rodino Act. This enforcement action is a harsh reminder of the FTC’s narrow interpretation of the exemption and provides additional insight on the types of conduct that the FTC deems inconsistent with passive investment intent. In a separate statement, the Director of the FTC’s Bureau of Competition emphasized that the test for the “investment-only” exemption is the acquirer’s intention, and merely “considering” or “expecting” to take certain actions may be … Read more