The Federal Trade Commission Secures Record-Breaking $12 Million in Civil Penalties for HSR Filing Violations

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On July 13, 2026, the FTC announced a proposed settlement providing for record-breaking civil penalties of $12 million to resolve allegations that Edwards Lifesciences Corporation (Edwards) and Genesis MedTech Group Limited (Genesis) structured Edwards’ acquisition of JC Medical (JC) to evade HSR review. Parties discussing and contemplating mergers and acquisitions should carefully assess HSR requirements when structuring transactions, including the potential implications of related transaction arrangements.

Background

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), parties to transactions that meet the applicable jurisdictional thresholds must notify the FTC and the Department of Justice (DOJ) and observe a statutory waiting period, generally thirty (30) days, before closing. For 2026, the minimum size-of-transaction threshold is $133.9 million, and a size-of-person test may also apply. Acquisitions solely of non-voting securities generally are not reportable under the HSR Act. However, under 16 C.F.R. § 801.90, any transaction or device entered into or employed for the purpose of avoiding the obligation to comply with the HSR Act is disregarded, and reportability is determined based on the substance of the transaction.

According to the FTC’s complaint, Edwards began negotiating in early 2024 to acquire JC from Genesis. Edwards wanted to keep the price below the then-applicable $119.5 million HSR threshold, while Genesis valued JC at $125 million to $150 million. To bridge the gap, the parties allegedly paired a $115 million purchase price for JC, plus milestone payments, with a separate $25 million investment by Edwards in non-voting shares of Genesis. The two components were documented in separate term sheets, but the transmittal email described them as parts of a single transaction that would close concurrently. Edwards closed the JC acquisition on July 22, 2024, without an HSR filing, and acquired the Genesis shares on August 9, 2024. According to the FTC, Edwards was concerned that HSR review would significantly delay closing of the JC acquisition, particularly in light of its concurrent negotiations to acquire JC’s only competitor, JenaValve Technology, Inc. (JenaValve). Edwards announced the JenaValve acquisition on July 24, 2024, two (2) days after closing the JC acquisition. Edwards also allegedly told JenaValve that no HSR filing was required for JC because the deal was “below the threshold.” The FTC subsequently sued to block the JenaValve acquisition, and the parties abandoned the deal after the U.S. District Court for the District of Columbia granted a preliminary injunction.

FTC Allegations and Proposed Settlement

The FTC alleged that Edwards and Genesis violated the HSR Act’s notification and waiting period requirements because a substantial portion of the $25 million Genesis investment was additional consideration for JC, bringing the total price above the then-applicable $119.5 million threshold and making the JC acquisition reportable.

Under the proposed final judgment announced on July 13, 2026, Edwards would pay a $10 million civil penalty and Genesis would pay a $2 million civil penalty. During the five-year term of the judgment, Edwards would also be required to give the FTC advance written notice of certain otherwise non-reportable acquisitions involving TAVR-AR devices, establish an antitrust compliance program, and cooperate with the FTC’s compliance monitoring. The proposed final judgment is subject to court approval, and the defendants deny any wrongdoing.

Takeaways

This matter is a reminder that the FTC will aggressively enforce HSR compliance and may scrutinize economically related arrangements, including contemporaneous investments and milestone payments, rather than relying solely on how consideration is allocated among separate transaction documents. Sellers are not insulated from HSR enforcement risk. Genesis, a non-U.S. seller, would pay its own penalty. Internal communications, and communications with counterparties, discussing the HSR threshold may also be used as evidence of intent. Parties may legitimately negotiate a price below the applicable threshold, but should involve antitrust counsel early and carefully evaluate the HSR implications of related consideration and transaction arrangements before signing.