The Federal Trade Commission (FTC) announced on July 13, 2026, that it imposed penalties, totaling $12 million, in a failure-to-file settlement with Edwards Lifesciences Corp. and Genesis MedTech Group Limited. The FTC complaint alleges that the companies violated the Hart-Scott-Rodino Act (HSR Act) when they closed an acquisition in July 2024 without submission of the required premerger notification and observation of the required waiting period.
The FTC is committed to HSR Act compliance and believes that substantial penalties are needed to deter parties seeking to avoid the HSR Act‘s requirements.
HSR Act Requirements
The HSR Act requires parties of a certain size, contemplating transactions of a certain size, to notify both the FTC and the Department of Justice, Antitrust Division, and observe a waiting period (typically thirty days) before consummation.
Acquisitions of nonvoting securities are generally not reportable, and the value of nonvoting securities would not be included in the size-of-transaction threshold under the HSR Act.
Advance notification of significant transactions, and adherence to the waiting period, provide the federal antitrust agencies with an opportunity to review and, when necessary, to seek an injunction to prevent the consummation of acquisitions that may substantially lessen competition.
Penalties for Noncompliance
Failure to make a filing carries penalties of up to $53,088 per day.
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The regulations promulgated under the HSR Act make clear that the FTC will disregard “devices . . . employed to avoid” the obligation to make a filing.
The FTC‘s complaint alleges that Edwards and Genesis MedTech intentionally structured the sale of Genesis MedTech‘s subsidiary to Edwards to avoid triggering a filing.
Genesis MedTech would not accept a valuation below the then-applicable HSR threshold of $119.5 million, and Edwards did not want agency review to delay the transaction.
The buyer purchased $25 million of Genesis nonvoting securities to reduce the valuation of the voting securities to below the HSR Act‘s threshold.
Settlement and Consequences
The parties settled for a combined $12 million.
As part of the settlement, Edwards will also be subject to additional requirements, including prior notice for certain U.S. acquisitions for five years and maintenance of an antitrust compliance program.
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FTC Chairman Andrew Ferguson warned that “[t]he FTC will be vigilant in enforcing the requirements of the Hart-Scott-Rodino Act and we will not hesitate to seek penalties for its violation.”
Allocation of purchase price to nonvoting securities can be legitimate, but doing so solely to avoid an HSR filing is not permitted under the regulations.
Noncompliance with the HSR Act carries serious penalties, as fines continue to mount for each day that a party is in violation of the act.
Sellers should take care when agreeing to structures that appear to avoid an HSR filing, particularly when the selling company will continue to exist post-closing and when the transaction could present substantive antitrust concerns.
Some state “mini-HSR” statutes, including those in California, Colorado, and Washington, provide for their own penalties.
Consultation with experienced counsel early in a transaction can assist with mitigating such risks.
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