Capital One CEO Fined $640,000 For Allegedly Boosting $168 Million Stock Holdings Through Illegal Transactions

Capital One CEO Fined $640,000 For Allegedly Boosting $168 Million Stock Holdings Through Illegal Transactions


Capital One Cofounder and CEO Richard Fairbank has been ordered to pay a $637,950 civil penalty to settle expenses he violated antitrust legal guidelines by repeatedly failing to report inventory transactions related along with his compensation bundle over the previous twenty years, the Federal Commerce Fee introduced Thursday.

Key Info

In a criticism launched Thursday, the FTC alleges Fairbank illegally acquired 101,148 shares of Capital One voting inventory in 2018 as a result of he didn’t first notify the company and the Division of Justice, as required by the Hart-Scott-Rodino Act of 1976, which goals to curb antitrust practices by permitting regulators to research transactions.

The acquisitions boosted Fairbank’s holdings to greater than $168.8 million on the time, excess of the $100 million threshold requiring disclosure below the HSR Act, the FTC stated. 

The company notes Fairbank did not make a correction submitting till December 2019, that means he was in violation of the legislation for almost two years. 

Based on the criticism, Fairbank beforehand didn’t adjust to the HSR Act on two different events since 1999, although the FTC gave him a “free move” after he pledged to make sure the required HSR notifications could be filed going ahead.

Capital One didn’t instantly reply to Forbes‘ request for remark.

Essential Quote 

“Because the CEO of one among America’s largest banks, Richard Fairbank repeatedly broke the legislation,” FTC official Holly Vedova stated in a Thursday assertion. “There isn’t a exemption for Wall Road bankers and highly effective CEOs in the case of complying with our nation’s antitrust legal guidelines.”

Key Background

Fairbank cofounded Capital One in 1988 and took the corporate public as CEO in 1994 earlier than constructing it into one of many nation’s largest banks. It posted $26 billion in income final 12 months and has amassed a market capitalization of greater than $72 billion. Based on Fairbank’s newest disclosure, filed in July, he nonetheless owns about $60 million price of Capital One inventory. In the meantime, Fairbank is not alone amongst huge banking executives going through the ire of regulators. In November, the Securities and Alternate Fee charged two former Wells Fargo executives, together with onetime CEO and Chairman John G. Stumpf, for allegedly deceptive buyers in regards to the success of the financial institution’s largest enterprise phase in 2015 and 2016.

Additional Studying

SEC Fees Wells Fargo Executives, Together with Former CEO, For Deceptive Traders About Financial institution’s Efficiency (Forbes)

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