The Federal Trade Commission (FTC) has fined, and Gates has agreed to pay, $800,000 to effectively teach Microsoft Corp’s chief software architect not to do it again. Gates is reputedly the world’s richest man with an estimated personal worth of $48bn.
FTC competition bureau deputy director Barry Nigro said in a statement: This case demonstrates the need to become fully aware of the reporting requirements of the HSR [Hart-Scott-Rodino] Act.
According to the FTC, Gates was fined for repeating exactly the same offense in a share transaction in May 2002 that he’d committed earlier, in November 2001.
In 2001, Gates acquired additional shares in Republic Services Inc, an environmental services company, putting his stake in outstanding Republic shares at more than 10% of the shares available. Gates did not file under HSR, relying on an exemption from reporting requirements for acquisitions solely for the purposes of investment.
That exemption is limited to holdings that do not exceed 10%, though, and Gates subsequently corrected the mistake, the FTC said.
Rather than take action, the FTC wrote to Gates saying he was accountable for instituting an effective program for entities he controls to ensure full compliance with the Act’s requirements.
However, Gates relied on the 10% exception to avoid again reporting in 2002, this time when acquiring additional shares in biomedical company ICOS Corp.
Although the Commission has often declined to seek penalties from a party that makes an inadvertent mistake and fails to file, once he is aware that he doesn’t have a complete understanding of the HSR Act, he needs to go back and learn about the Act so he doesn’t make a second mistake. The Commission will seek substantial penalties for the second mistake, Nigro said.
A spokesperson for the Gates family said procedures had been implemented to prevent a repeat of this mistake, adding: At no time was Mr. Gates personally involved in these matters.
This article is based on material originally published by ComputerWire
