Berkshire Hathaway agrees to settle U.S. charges on stock deal

Wed Aug 20, 2014 2:35pm EDT
 
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By Jonathan Stempel

(Reuters) - Warren Buffett's Berkshire Hathaway Inc agreed to pay an $896,000 fine to settle U.S. government accusations that it violated antitrust rules by failing to report a transaction that boosted its stake in building products company USG Corp.

The civil penalty, which requires court approval, settles charges made on Wednesday by the U.S. Department of Justice and Federal Trade Commission that Berkshire violated the Hart-Scott-Rodino antitrust law by not telling regulators about the transaction in advance.

That law requires regulatory approval for some transactions, and is designed to help protect competition.

Berkshire on Dec. 9, 2013, exchanged $243.8 million of USG convertible notes for 21.39 million common shares, giving it a roughly 28 percent stake in USG worth more than $950 million.

Regulators said that Berkshire, based in Omaha, Nebraska, was required to report the exchange in advance because the new stake was more than three times the minimum required, but failed to do so.

The transaction occurred four days after the FTC decided not to punish Berkshire for a similar "inadvertent" violation involving financial services company Symetra Financial Corp, relying on Berkshire's assurance that it would comply with Hart-Scott-Rodino.

"Although we may not seek penalties for every inadvertent error, we will enforce the rules when the same party makes additional mistakes after promises of improved oversight," Deborah Weinstein, director of the FTC bureau of competition, said in a statement.

Berkshire corrected the USG reporting error on Jan. 3.   Continued...

 
Berkshire Hathaway shareholders walk by a video screen at the company's annual meeting in Omaha May 4, 2013. REUTERS/Rick Wilking/Files