Clifford Chance

Federal Trade Commission Announces Record US$5.68 Million Fine for Gun-Jumping Violations in Acquisition of Oil Company

January 8, 2025

On January 7, 2025, the U.S. Department of Justice and U.S. Federal Trade Commission announced that three U.S. crude oil producers had agreed to settle allegations of “gun-jumping” by paying $5.68 million in penalties, the largest gun-jumping fine in U.S. history. According to the agencies’ allegations, XCL Resources and Verdun Oil Company, upon reaching an agreement to purchase EP Energy, took over EP’s “key ordinary-course functions” almost immediately after signing, thereby unlawfully assuming beneficial ownership of the business before the expiration of the waiting period under Section 7A of the Clayton Act, 15 U.S.C. §18A, commonly known as the Hart-Scott-Rodino Act or “HSR” Act. Importantly, the complaint states that “[t]his was no mere technical violation; the Defendants’ conduct effectively allowed one competitor to acquire beneficial ownership . . . before the transaction closed.” 

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