May 24, 2012
Executive Charged With Obstruction of Justice in HSR Premerger Filing
On May 3, 2012, the U.S. Department of Justice (DOJ) filed a two-count felony
charge against Kyoungwon Pyo, a senior vice president for corporate strategy
of Hyosung Corporation, alleging that he altered corporate documents submitted
to the federal antitrust agencies in connection with premerger filings made
pursuant to the Hart-Scott-Rodino (HSR) Act. Item 4(c) of the HSR notification
form requires merging parties to submit certain internal documents that were
prepared "for the purpose of evaluating or analyzing the acquisition with
respect to market shares, competition, competitors, markets, potential for sales
growth or expansion into product or geographic markets." The altered documents
allegedly misrepresented and minimized the competitive impact of the proposed
acquisition. Pyo agreed to plead guilty and serve five months in prison. This
case marks the first time obstruction of justice charges have followed a civil
merger investigation and highlights the importance of properly complying with premerger notification requirements.
Court Upholds Four-Year Prison Sentence for Price-Fixing Cartel
An appeals court has
upheld the 48-month prison sentence and $800,000 criminal fine
imposed by a trial court judge against Steven VandeBrake for his
participation in a ready-mix concrete price-fixing cartel. The sentence and fine
were both substantial upward departures from the U.S. sentencing guidelines and
from the terms of the nonbinding plea agreement VandeBrake had entered into with
the DOJ. Under the terms of the plea agreement, VandeBrake agreed to plead
guilty, serve 19 months in prison and pay a criminal fine of $100,000. However,
following a three-day sentencing hearing, the trial judge rejected the plea
agreement and imposed the significantly harsher sentence. The appeals court held
that the trial judge's reasons for departing from the sentencing
guidelines—including his policy disagreements with the sentencing guidelines, as
well as VandeBrake's "appalling greed" and lack of remorse—were valid and
permissible. This is the longest prison sentence ever imposed on a cartel
participant.
Resale Price Maintenance Is Per Se Violation of Kansas State Antitrust Law
The Kansas Supreme Court recently
held that the U.S. Supreme Court's decision in Leegin Creative Leather
Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007), that resale price
maintenance is not per se illegal under the Sherman Act does not preempt claims
brought under the state antitrust law. This case serves as a reminder that
manufacturers need to be careful when establishing pricing policies for
distributors and retailers because of how state antitrust laws may be
interpreted and enforced.
Compliance Warning: Handle IT Issues Carefully During a Dawn Raid
A recent European Commission decision imposing a fine for obstructing access
to emails during one of its "inspections" (dawn raids) provides a reminder that
IT issues must be carefully handled during a dawn raid and that compliance
training needs to cover this issue in detail. Additional information is
available in our
May 2012 EU/UK Competition Law Newsletter.
For more information, please contact the lawyers in the
Antitrust & Trade
Regulation Department at McGuireWoods.