Investment firm chairman Fayez Sarofim to settle antitrust violations
(Reuters) — Fayez Sarofim, a billionaire darling of Houston high society known for running a Texas investment company, has agreed to pay a $720,000 civil penalty for failing to report the purchase of voting securities of Kinder Morgan and Kemper Corp., the Federal Trade Commission said Friday.
Mr. Sarofim, chairman of Fayez Sarofim & Co. investment advisers, bought Kinder Morgan securities in 2001, 2006 and 2012, and Kemper Corp. securities in 2007, but failed to notify antitrust enforcers, the FTC said.
Big mergers and large share purchases must be reported to the FTC, which works with the Justice Department to ensure that the transactions are legal under antitrust law.
The Egyptian-born, thrice-married Mr. Sarofim, whose life story rivals anything seen in TV soap operas, supported Jeb Bush in his run for the presidency.
He is one of 20 "investment professionals" listed on the website of his Houston-based firm, Fayez Sarofim & Co.
The government said in its complaint that Mr. Sarofim's initial Kinder Morgan share purchases could be described as for investment only, and thus would be exempt from reporting to the FTC. But once he was on the board of directors, further share purchases needed to be reported, the government said.
Similarly, Mr. Sarofim was on the board of Unitrin, which later became Kemper, when he bought 10,000 shares of the company in 2007, as well as subsequent share purchases. He also failed to report these purchases to the FTC, the government alleged.
The Justice Department brought the case on behalf of the FTC.
Mr. Sarofim did not respond to a request for comment.
