- Joined
- Oct 26, 2008
- Messages
- 2,247
- Points
- 48
U.S. securities regulators on Wednesday charged billionaire hedge fund manager Philip Falcone and his Harbinger Capital firm with fraud.
The Securities and Exchange Commission claims that Falcone used client assets to pay $113 million in personal taxes, manipulated bond prices and played favorites with certain clients.
In addition, the SEC claims that Harbinger made illegal stock trades in three initial public offerings.
"Today's charges read like the final exam in a graduate school course in how to operate a hedge fund unlawfully," said Robert Khuzami, director of the SEC's division of enforcement, in a statement.
The lawsuit comes after Harbinger failed to prevent one of its biggest investments from going bankrupt. Wireless network LightSquared filed for Chapter 11 in May after its $9 billion partnership with Sprint (S, Fortune 500) dissolved. Harbinger is LightSquared's main financial backer.
The SEC also charged Harbinger's former chief investment officer, Peter Jenson, for "aiding and abetting" the misappropriation of fund assets.
Read more: http://money.cnn.com/2012/06/27/investing/falcone-harbinger/
The Securities and Exchange Commission claims that Falcone used client assets to pay $113 million in personal taxes, manipulated bond prices and played favorites with certain clients.
In addition, the SEC claims that Harbinger made illegal stock trades in three initial public offerings.
"Today's charges read like the final exam in a graduate school course in how to operate a hedge fund unlawfully," said Robert Khuzami, director of the SEC's division of enforcement, in a statement.
The lawsuit comes after Harbinger failed to prevent one of its biggest investments from going bankrupt. Wireless network LightSquared filed for Chapter 11 in May after its $9 billion partnership with Sprint (S, Fortune 500) dissolved. Harbinger is LightSquared's main financial backer.
The SEC also charged Harbinger's former chief investment officer, Peter Jenson, for "aiding and abetting" the misappropriation of fund assets.
Read more: http://money.cnn.com/2012/06/27/investing/falcone-harbinger/
