26 August 2015

Hedge fund settles with US over Yahoo competition claims

Third Point, a US based hedge fund, has avoided a large fine by settling with the US government over claims it breached antitrust law in 2011 when it acquired a minority stake in Yahoo.

By Bernard Goyder

Yahoo was at the centre of an antitrust dispute nevodka

Hedge fund Third Point LLC has settled with the US Department of Justice over claims the investment firm broke antitrust rules in 2011. The American government alleged that a network of Third Point funds took five weeks too long to inform antitrust authorities it had become an activist investor in Yahoo. 


On taking a 5.3 per cent stake in the technology company, Josh Loeb, the Third Point CEO, launched an attack on the Yahoo management, demanding seats on the board for his own nominees and himself. The Federal Trade Commission (FTC) argued Loeb’s fund was in breach of the 1976 Hart-Scott-Rodino Act, which only excepts passive equity investors from filing with regulators. The settlement is understood to include an agreement by Third Point to comply with all federal antitrust rules in future. 

Narrow exception

“The investment-only exemption is a narrow exemption limited to those situations in which the investor has no intention to influence the management of the target firm,” said the FTC bureau of competition Director Deborah Feinstein. “Third Point’s conduct demonstrated that it intended to have more than a passive interest in Yahoo, which obligated its affiliated funds to make an HSR filing and wait before acquiring its shares”. Source: FTC press release.

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