The Federal Trade Commission fined Capital One Financial Chief Executive Richard Fairbank for failing to properly report stock awards to federal antitrust authorities.
Fairbank received 100,000 Capital One shares as part of his pay package in 2018 and didn’t wait for authorities to investigate before finalizing the acquisition of the shares, the FTC said. While Fairbank agreed to pay a $637,950 civil penalty to settle the charges, Capital One said his personal law firm has agreed to pay the full amount of the fine because the filing error was “due to administrative errors by the firm.”
The FTC alleged that the moves violated the Hart-Scott-Rodino Act, which requires companies and individuals to report large transactions to the FTC and the Justice Department so they can investigate the deals before they’re completed. Fairbank had received two previous warnings for failing to properly comply with the law, in 1999 and 2004, the FTC said.
“As the CEO of one of America’s largest banks, Richard Fairbank repeatedly broke the law,” Holly Vedova, acting director of the FTC’s Bureau of Competition, said in a statement Thursday. “There is no exemption for Wall Street bankers and powerful CEOs when it comes to complying with our country’s antitrust laws.”
Fairbank is a rarity in financial circles since he’s both the founder and the chief executive officer of one of the country’s largest banks. The 70-year-old’s net worth has soared alongside Capital One’s stock, and he became a billionaire in 2018, according to the Bloomberg Billionaires Index.
“For many years, Mr. Fairbank has been advised on his personal disclosure responsibilities by a well-respected international law firm,” Capital One said in an emailed statement. “As soon as his counsel identified the firm’s error, Mr. Fairbank promptly self-reported to the FTC and submitted a corrective HSR filing. His personal law firm has agreed to pay the full amount of the fine as a result of its mistake.”
