This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Falcone to Face SEC Lawsuit: Report

Story updated with a comment from Phillip Falcone's attorney.

NEW YORK ( TheStreet) -- The Securities and Exchange Commission is reportedly set to file a lawsuit against Harbinger Capital Partner founder Phillip Falcone.

According to Bloomberg News, the regulator plans to claim that Falcone illegally borrowed client money to pay taxes and created a sweetheart deal with Goldman Sachs to exit his flagship fund.

SEC commissioners have voted to allow the staff to move ahead and file a lawsuit, Bloomberg says, citing anonymous sources close to the matter. The sources added that the SEC may also push for "market manipulation" charges against the billionaire hedge fund guru in relation to bond investments in MAXX Holdings group.
Harbinger Group Phil Falcone

Harbinger has been the focus of federal scrutiny for over a year after it was reported that Falcone used a $113 million loan in 2009 to pay personal taxes. The SEC investigation focused on whether the loan -- which was eventually revealed -- was disclosed in a timely fashion, according to the Wall Street Journal..

Falcone has also been targeted over a decision that allowed Goldman to cash out of his failing fund while other investors were still locked up, and whether Harbinger improperly traded MAAX Holdings bonds, the Journal said.

Harbinger and Falcone have faced massive losses over the past year as a bet on high-speed wireless went south after 4G wireless provider LightSquared declared bankruptcy and wiped out most of Harbinger's near-$3 billion investment.

"Any allegations by the SEC of impropriety by Mr. Falcone or Harbinger are supported neither by the facts or the law," according to a statement from Matthew Dontzin, counsel for Falcone. "Should a lawsuit be brought it will be contested vigorously."

-- Written by Christopher Westfall in New York.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $109.27 -1.00%
FB $88.26 0.12%
GOOG $600.70 -0.92%
TSLA $241.93 -1.48%
YHOO $31.58 -2.95%

Markets

Chart of I:DJI
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASDAQ 4,683.9190 -49.5780 -1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs