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The Justice Department is investigating whether some private equity companies may have intentionally withheld information in previous mergers, a senior official said Wednesday.<\/p>\n
Richard Mosier, special counsel for private equity in the DOJ\u2019s antitrust division, said the agency has \u201crenewed focus\u201d on making sure that private equity firms comply with the federal law that requires companies to notify antitrust enforcers of their transactions, known as the Hart-Scott-Rodino or HSR Act.<\/p>\n
Companies that \u201ctry to game the system, they run the risk of having that HSR and perhaps prior HSRs scrutinized. The person who signs the form opens themselves up to liability,\u201d said Mosier, speaking at a conference in Washington.\u00a0<\/p>\n
Mosier declined to name any companies caught up in the probe. KKR<\/a> & Co. previously disclosed that the Justice Department was looking at the accuracy of its merger notification filings for some transactions in 2021 and 2022. In December, the company said it received a grand jury subpoena over the accuracy of its filings, an indication that the agency had opened a criminal probe. \u00a0<\/p>\n KKR declined to comment.\u00a0<\/p>\n He cited\u00a0February remarks<\/a>\u00a0by another senior DOJ official who said private equity firms must fully comply with the merger notification law and that failure to provide disclosure represents \u201can existential threat\u201d to merger enforcement.<\/p>\n The Justice Department is intensifying scrutiny of the private equity industry under President Joe Biden. It has a sweeping investigation of overlapping board seats that is focused on the sector. The enforcement push relies on a rarely invoked antitrust prohibition against so-called interlocking directorates, where the same individuals or entities have board seats at competing businesses.<\/p>\n In the review of merger filings, in addition to a notification form, the law requires a company to turn over documents including studies, analyses and reports prepared for the company\u2019s board or executives about a deal. Mosier said the concerns largely revolve around companies\u2019 failure to turn over all required documents and the agency isn\u2019t looking at \u201caccidental\u201d situations where a company forgets about one or two things.<\/p>\n<\/div>\nSubscribe to CHRO Daily, our newsletter focusing on helping HR executive navigate the changing needs of the workplace. Sign up<\/a> for free.<\/div>\n<\/div>\n