Washington, DC - Investor Len Blavatnik has agreed to pay $656,000 in civil penalties to resolve Federal Trade Commission allegations that he violated federal premerger reporting laws by failing to report voting shares that he acquired in a California technology start up called TangoMe, in August 2014.
TangoMe markets a cross-platform messaging application for smartphones that offers free video calls, texting, and photo sharing over 3G/4G and wifi networks.
According to the FTC, Blavatnik, via his company Access Industries, purchased shares of TangoMe that brought the value of his stake in the company to approximately $228 million. Under the HSR Act, parties must notify the FTC and the Department of Justice of large transactions that affect commerce in the United States and otherwise meet the statutory filing requirements.
The FTC charged that Blavatnik was required to report the transaction to U.S. antitrust authorities under the HSR Act. According to the complaint, Blavatnik eventually made a filing for the acquisition, acknowledging that the acquisition was reportable and that his failure to report the transaction in a timely fashion was inadvertent.
Blavatnik had previously violated the HSR Act in 2010, when he bought voting shares of LyondellBasell Industries N.V., a public multinational chemical company. Blavatnik also made a later filing in that case and made representations to the Commission that he would discuss reportability with HSR counsel prior to any future acquisitions. Although the Commission did not pursue a civil penalty against him for the 2010 violation, the FTC’s Premerger Notification Office informed Blavatnik that he was accountable for ensuring compliance with the Act.
Despite his previous commitment, Blavatnik did not consult with HSR counsel prior to the August 23, 2014 acquisition of TangoMe voting securities.
The Commission vote to refer the complaint and proposed stipulated civil penalty order to the Department of Justice for filing in federal court was 5-0. The Department of Justice filed the complaint and proposed order in the U.S. District Court for the District of Colombia on October 6, 2015.