The Federal Trade Commission announced a $637,950 civil penalty against Richard Fairbank, the CEO of Capital One Financial Corps, for violating the Hart-Scott-Rodino Act, which Fairbank has agreed to pay.
Fairbank recently acquired 100,000 shares of his own company, Capital One, which brought the worth of his shares to $168 million. However, Fairbank did not report the trade to the proper authorities to receive the money. The case against him also claims he illegally closed the deal before an investigation could be conducted.
The Hart-Scott-Rodino Act requires companies and individuals to report large transactions above a certain threshold to the FTC and Department of Justice for investigation before the deals close. Authorities have 30 days to conduct the investigation, and it is illegal to close a deal before or during the investigation.
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Holly Vedova, acting director of the Bureau of Competition, reiterated in a press release that Wall Street bankers and CEOs are not above the law.
“As the CEO of one of America’s largest banks, Richard Fairbank repeatedly broke the law,” Vedova said. “There is no exemption for Wall Street bankers and powerful CEOs when it comes to complying with our country’s antitrust laws.”
Fairbanks has violated the HSR Act before, according to the press release. However, this is the first time he has been charged.
The FTC gave him free passes in 1999 and 2004 because he assured the organizations he would implement a system to prevent the same mistake from happening again.
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Fairbank once again failed to file in March of 2018. However, he made a corrective filing and waited the required amount of time before proceeding.
In an email to BNN Bloomberg, a Canadian financial and business news organization, Capital One said Fairbank immediately turned himself in to the FTC after hearing of the mistake.
Fairbank’s personal law firm will pay the full amount of the fine.
