James Dolan Fined $600,000 by Federal Trade Commission for Stock Buy Reporting Violations

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MSG CEO, Chairman James Dolan attends as Madison Square Garden celebrates Billy Joel's 100th lifetime show at Madison Square Garden on July 18, 2018 in New York City. 

A spokesperson for the Madison Square Garden CEO said the mistake was made by Dolan's attorney, who will pay fine "as a result of their mistake."

Madison Square Garden Chairman and CEO James Dolan has agreed to settle $609,810 in civil penalties with the Federal Trade Commission (FTC) related to reporting violations over the acquisition of more than $161 million in voting securities in Madison Square Garden Company dating back to last year.

Officials with the FTC say Dolan twice violated the Hart-Scott-Rodino Act, which requires companies and individuals to notify regulators and the Department of Justice when they make acquisitions that increase the value of their voting securities in a company above certain thresholds. The law also requires buyers to observe a mandatory waiting period before completing their transactions.   

Regulators say Dolan never notified the government when his holdings crossed the reporting threshold and that he also didn't adhere to the mandatory waiting period. According to a press release, Dolan violated the act beginning Sept. 11, 2017, when he acquired the additional MSG voting securities. Despite later submitting a corrective filing, Dolan was found to have remained in violation of the Hart-Scott-Rodino Act from Sept. 11 until Dec. 26, 2017, when the waiting period on his corrective filings had expired. Officials from the FTC said the 2017 incident was the second time Dolan had violated reporting rules, saying he made a similar mistake in 2010 after acquiring voting securities in Cablevision.

A spokesperson for Dolan said the mistake was a result of an error made by Dolan's lawyers: "Debevoise & Plimpton is the law firm responsible for making timely (Hart-Scott-Rodino Act) filings relating to Jim Dolan’s MSG stock. Debevoise inadvertently missed a required (Hart-Scott-Rodino Act) filing deadline, for a second time, which resulted in a fine by the FTC. Debevoise agreed to pay the fine as a result of their mistake.”

Kenneth A. Libby, special attorney for the DOJ's Antitrust Division wrote in a competitive impact statement that Dolan did not face the maximum penalty "because the violation was inadvertent, the Defendant promptly self-reported the violation after discovery, and the Defendant is willing to resolve the matter by consent decree and avoid prolonged investigation and litigation."

Dolan's proposed settlements will be published in the Federal Register and private citizens may submit written comments concerning the proposed settlements. Click here to learn more about submitting a written comment.


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