Rare FTC-DOJ Joint ‘Gun Jumping’ Action Results in Record Penalty

By: Thomas E. Hogan, Lisa A. Houssiere, Matt Schock, Jeffrey E. Liskov & Aleksey Pricinovskis (BakerHostetler/Antitrust Advocate)

In this blog post, the BakerHostetler team discusses the recent joint complaint filed by the FTC and DOJ on January 7, 2025, against XCL, Verdun, and EP for an alleged gun-jumping violation. Alongside the complaint, the parties submitted a proposed final judgment, under which the defendants agreed to pay nearly $5.7 million in penalties for allegedly violating the HSR Act’s required waiting period.

The HSR Act mandates that certain transactions be pre-notified to the FTC and DOJ, followed by a 30-day waiting period before closing. During this time, the agencies review the transaction for potential competition concerns and may extend the period by issuing a “Second Request.” If parties prematurely exercise beneficial ownership of the target company, they can be fined, with penalties currently set at a maximum of $51,744 per day of violation.

In July 2021, XCL and Verdun entered into a purchase agreement to acquire EP for approximately $1.4 billion, a deal large enough to require an HSR filing. All three companies were involved in crude oil extraction, with overlapping operations in Utah. At signing, XCL and Verdun also entered into an operating agreement that restricted EP’s operational rights, including requiring approval for crude oil development activities. These restrictions effectively transferred beneficial ownership of EP before the HSR waiting period expired.

The agreement was later amended in October 2021 to allow EP to resume its normal business operations, after the transaction had been subjected to a Second Request and after 94 days of alleged violation. To settle the gun-jumping allegations, XCL, Verdun, and EP agreed to pay nearly $5.7 million to the FTC and DOJ…

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