Eddie Lampert's $800K Filing Oversight

Now that we have a purported $50 billion Ponzi scheme by one of Wall Street's best known traders occupying news, all other illegalities by financiers are going to look like small potatoes.

But that doesn't mean they aren't worth mentioning, Eddie Lampert.

A hedge fund investor who was frequently compared to Warren Buffett during his more successful days, Lampert was fined yesterday by the antitrust division of the Department of Justice. His ESL Partners, along with related fund ZAM Holdings, agreed to pay $800,000 in civil penalties for failing to file the required notifications about their ownership in Autozone with the Federal Trade Commission.

Lampert is perhaps best known for orchestrating the merger of Kmart and Sears and he remains the chairman of the struggling retail combination. In 2003, Lampert spent a night handcuffed and blindfolded in a hotel room after being kidnapped by several men who demanded ransom.

This DOJ fine stems from Lampert's failure to tell antitrust regulators about his purchase of Autozone shares under requirements in the Hart-Scott-Rodino Act. Any person holding more than $50 million in voting securities is required to report certain transactions to the government, and owners of $200 million must report all transactions.

According to the complaint, the funds held $775 million in Autozone shares as of September 1, 2004 and when they acquired additional shares later that month and the following month, they did not notify the government. They eventually filed them in early 2005 after the F.T.C. inquired about them.

"At the time of the purchases, ESL was already AutoZone's largest holder, at 25.3 percent, and had been an investor in the company since 1997," an ESL spokesman told the Chicago Sun-Times. "Although its (antitrust law) filing was ultimately approved by the FTC, ESL regrets that these filings were not made on time."

It's an administrative legal hiccup, but one that Lampert didn't need at the end of what's shaping up to be a tough year. Between September 19 and October 24, Lampert's funds shed $5 billion.

by Megan Barnett