Trump Agrees To Pay $750,000 Penalty To Settle Antitrust Lawsuit
WASHINGTON (AP) _ New York real-estate magnate Donald Trump agreed Tuesday to pay a $750,000 civil penalty to settle an antitrust lawsuit stemming from his attempted takeovers of Holiday Corp. and Bally Manufacturing Corp.
Trump agreed to pay the penalty to settle a suit filed by the Federal Trade Commission alleging that his 1986 stock purchases in the two companies violated the notification procedures required by the Hart-Scott-Rodino Act.
The law requires that buyers must notify the government before purchasing more than $15 million worth of voting stock in a company and wait 30 days before completing the transaction.
The FTC complaint, filed in U.S. District Court along with the proposed settlement agreement, charged that Trump violated the law by failing to notify the government of Holiday stock acquisitions made between Aug. 22, 1986 and Oct. 17, 1986.
The complaint also charged that Trump committed the same violation when he acquired more than $15 million in shares of Bally stock between Nov. 13, 1986 and Dec. 1, 1986.
The settlement is the second in two days by the FTC involving the so-called ″parking″ of stock with a brokerage house.
On Monday, the Belzberg family of Canada agreed to pay a $400,000 penalty to settle a similar suit arising from its attempt to buy a controlling interest in Ashland Oil Co.
Both cases involved the purchase of stock options through Bear, Stearns & Co., which, in turn, bought actual shares. The FTC contends that the subsequent exercise of the stock options was covered by the notification procedures of the Hart-Scott-Rodino Act.
In a statement, Trump said he decided to settle the case ″to avoid protracted litigation within the federal government over a highly technical disagreement between the FTC and the business community.″
Trump said ″I firmly believe that I was in full compliance with the Hart- Scott-Rodino Act reporting restrictions.″
Trump said ″the most respected lawyers in the business″ told him the law exempted the purchase of stock options. ″Bear, Stearns also gave me the same assurance,″ Trump said. ″I assume Bear, Stearns will reimburse me for the expense.″
A Bear, Stearns spokeswoman said the company had no immediate comment.
Wickes Cos. agreed last month to pay a $300,000 civil penalty to settle a similar complaint. Bear, Stearns also served as the broker for Wickes Cos.