, will be required to pay a $985,320 civil penalty to settle charges related to his acquisition of Wells Fargo & Company (Wells Fargo) shares, which violated the Hart-Scott-Rodino (HSR) Act.

According to the FTC complaint, Cohen, who is also the founder and former CEO of Chewy, Inc., purchased over 562,000 Wells Fargo voting securities, pushing his aggregated holdings of Wells Fargo securities beyond the HSR filing thresholds. This triggered an obligation for Cohen to file an HSR form with federal antitrust agencies and wait before finalizing the acquisition. However, Cohen failed to fulfill these requirements, thereby violating the HSR Act.

The HSR Act, designed to ensure transparency in large transactions, including securities acquisitions, mandates that companies and individuals report such transactions exceeding specific thresholds to the FTC and the Department of Justice (DOJ) for investigation before they are finalized. Within 30 days of a transaction being reported, the agencies may conduct an initial investigation and file a "second request" to demand additional information. It is generally illegal to complete an acquisition during this investigatory period. At the time of Cohen's violation, the maximum civil penalty for an HSR violation was set at $43,792 per day.

Despite Cohen's acquisition representing less than 10 percent of Wells Fargo's outstanding voting securities, it was determined that his acquisition did not qualify for exemption under the Investment-Only Exemption of the HSR Act. Evidence cited in the complaint included emails where Cohen expressed his intention to influence Wells Fargo's business decisions and advocated for a board seat. Following the acquisition, periodic communication between Cohen and Wells Fargo's leadership ensued, discussing suggestions to enhance the company's operations and his interest in securing a board seat.

The settlement agreement, accepted by a unanimous 5-0 vote from the FTC, will now be referred to the Department of Justice for filing in the U.S. District Court for the District of Columbia. As per the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register, allowing a 60-day comment period for interested individuals to submit their written opinions to the designated Special Attorney.

Ultimately, the U.S. District Court for the District of Columbia will make the final decision on whether to approve the proposed settlement after evaluating its compliance with the public interest.

The FTC, an organization dedicated to promoting competition and safeguarding consumer interests, issued a reminder to the public that they will never demand money, make threats, or promise prizes. To learn more about the benefits of competition or to file an antitrust complaint, individuals are encouraged to visit the FTC website, follow the organization on social media platforms, subscribe to press releases, and read their blog for the latest news and resources.

Overall, this settlement serves as a reminder of the importance of adhering to federal acquisition laws and the consequences that non-compliance can have on individuals and businesses alike.