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Financial firm to pay fine for taking lawyer's wrong advice


A financial services firm that agreed to pay $240,000 to settle Federal Trade Commission charges that it violated U.S. premerger notification requirements had acted on its attorney’s wrong advice, the FTC said.

New York-based Leucadia National Corp. agreed to pay the $240,000 to resolve FTC allegations that it violated federal premerger reporting laws by failing to report a conversion of its ownership interest in the Jersey City, New Jersey-based financial services company Knight Capital Group Inc., said the FTC in a statement issued Tuesday.

The FTC said that in July 2013, Knight Capital consolidated with another financial services company, Chicago-based Getco Holding Co. L.L.C., to become KCG Holdings Inc.

That transaction converted Leucadia’s ownership interest in Knight Capital into nearly 16.5 million voting shares of the new entity, KCG Holdings, worth approximately $173 million, the FTC said.

The FTC said that under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, parties must notify the FTC and the U.S. Department of Justice of large transactions above certain dollar thresholds that affect commerce in the United States and otherwise meet the statutory filing requirements.

Leucadia, however, did not report the transaction, according to the complaint, because, based on its counsel’s advice, it thought it qualified for an exemption applicable to institutional investors, the FTC said. The counsel was not identified in the statement.

Leucadia made a corrective filing in September 2014, acknowledging the acquisition was reportable under Hart-Scott-Rodino, the FTC said.

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