James L. Dolan, CEO of the Madison Square Garden Co., owner of the Knicks and Rangers sports teams, has settled charges that he broke federal securities law, agreeing to a fine of almost $610,000, according to court filings on Thursday.
Madison Square Garden said Dolan missed a filing deadline that resulted in the fine because his law firm made a mistake. The law firm will pay the fine, MSG said.
Dolan failed to meet the deadline to tell the Federal Trade Commission of his acquisition of additional MSG stock last year as part of his compensation package, and he didn't observe the required waiting period before completing the stock transaction, according to the filings.
MSG paid Dolan $11.6 million last year, including more than $7 million in stock grants, securities filings show.
The federal Hart-Scott-Rodino Act stipulates that large holders of stock in public companies must tell the FTC of changes to their holdings.
The Justice Department, on behalf of the FTC, filed papers in federal court in Washington on Thursday seeking a judge’s approval of the proposed settlement with Dolan, who lives in Cove Neck.
Prosecutors said this was the second time that Dolan had failed to notify the FTC; the first violation occurred in 2010 and involved the stock of cable television and broadband provider Cablevision Systems Corp., where Dolan was CEO at the time. That violation did not result in a fine, prosecutors said.
In 2016 the Dolan family sold Bethpage-based Cablevision to Altice N.V. of the Netherlands for $17.7 billion. Cablevision owned Newsday at the time.
MSG, in a statement on Thursday, said both violations were the fault of James Dolan's attorneys at Debevoise & Plimpton in Manhattan.
The law firm “inadvertently missed the required Hart-Scott-Rodino filing deadline, for a second time, which resulted in a fine by the FTC. Debevoise agreed to pay the fine as a result of their mistake,” MSG said.
A Debevoise spokesman declined to comment.
Besides the sports teams, MSG owns its namesake arena above Penn Station, Radio City Music Hall and the Beacon Theatre.