Gates pays fine over ICOS shares

  • By Eric Fetters / Herald Writer
  • Monday, May 3, 2004 9:00pm
  • Business

Bill Gates is paying an $800,000 fine for violating federal rules by making a large investment in Bothell-based ICOS Corp.

Gates, the chairman of Microsoft Corp., agreed to the civil penalty for the violation arising from his acquisition two years ago of more than $50 million in ICOS securities.

Gates sits on ICOS’ board of directors and is a longtime investor in the biotechnology company. As of February, he owned 9 percent – about 5.7 million shares – of ICOS’ stock, according to company financial filings.

His agreement to pay the fine settles a Justice Department lawsuit filed Monday in U.S. District Court in Washington. The suit contended Gates should have complied with investment notification rules because he intended to participate in the company’s business decisions.

Federal law imposes notification and waiting periods on certain individuals and companies before they can complete acquisitions of stock or assets worth more than $50 million. The maximum penalty is $11,000 for each day in violation.

Only a year before the ICOS purchase, in 2001, Gates had bought shares in Republic Services, a trash-hauling company, that required notification. Though he failed to tell antitrust authorities, the Federal Trade Commission declined to seek penalties in that case after Gates corrected his error.

A representative from Gates’ private investment firm, Cascade Investment LLC, could not be reached for comment.

The settlement and investment case is unrelated to Microsoft or the Justice Department’s antitrust case involving the software giant.

Gates, with a fortune estimated at $46.6 billion, was listed in February as the richest person in the world by Forbes magazine for the 10th straight year.

The Associated Press contributed to this story.

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