Cable boss Malone to pay $1.4M penalty
WASHINGTON (AP) – Cable television boss John Malone will pay a $1.4 million penalty after authorities said on Tuesday that he did not follow government rules on reporting major stock purchases over a three-year period.
The Justice Department announced the settlement with Malone, chairman of Liberty Media Corp., for his acquisition of shares of Discovery Holding Co.
Authorities said Malone failed to abide by antitrust pre-merger notification rules before acquiring shares of Discovery in 2005, and continued to acquire Discovery voting securities through April 2008. Last year, he made a corrective filing.
On Tuesday, the government filed a lawsuit and proposed settlement in the case in federal court.
The government said even after Malone's corrective filing, he acquired additional Discovery securities by exercising options. The court papers charge Malone was in violation of the government reporting requirements from 2005 to 2008.
The law requires notification and a waiting period on individuals and companies over a certain size before they complete acquisitions resulting in holding stock or assets above a certain value. In 2005, that value was $53.1 million.
Malone is a pioneer in the cable television industry and the founder of Liberty. Discovery, which owns a two-thirds stake in the Discovery networks, spun off from Liberty Media in July 2005.
Malone has also been a key investor in a number of media companies. In 2004 he sparked a feud with rival media mogul Rupert Murdoch by suddenly accumulating a large stake in the voting shares of News Corp. Murdoch and Malone settled that dispute in 2006 with an agreement to swap Malone's 16 percent stake in News Corp. for a controlling 38 percent stake in the satellite broadcaster DirecTV Group Inc., along with three regional sports cable networks and $550 million in cash.