ANALYSIS: Activist Investors Beware—Your “Passive” Investments May Not Be So Passive

Activist investor ValueAct Capital Management agreed Tuesday to pay a record $11 million fine to settle a Department of Justice lawsuit related to ValueAct’s investments in Halliburton Co. and Baker Hughes Inc. as the two oil giants were attempting to merge.

The DOJ alleged in an April 4 complaint that ValueAct violated antitrust laws—specifically, the Hart-Scott-Rodino Act—when it failed to disclose its $2.5 billion worth of investments in the companies after they announced their intent to merge. The DOJ claimed that ValueAct purchased the stock with the intent to influence the merger—via its access to senior executives of both companies—and ...