High-Flying Falcone Clipped By Fraud Charges
NEW YORK ( TheStreet) - Fraud charges aren't a harbinger of bad things to come for embattled hedge fund titan Philip Falcone - they're his next big headache.
Falcone and Harbinger Capital Partners, the hedge fund he founded, have been charged with fraud, market manipulation and betraying clients in a civil suit filed by the Securities and Exchange Commission on Wednesday.
The SEC alleges that Falcone illegally used $113.2 million in client funds to pay his personal taxes, while also engaging in illegal bond and stock trading. The hedge fund manager is also accused of misappropriation in allowing some investors to pull $169 million from his floundering hedge fund. Separately, Harbinger agreed on to pay nearly $1.4 million to settle with the SEC on alleged illegal stock trading.
The charges were widely expected after previous media reports highlighted the SEC's inquest into Falcone's use of client funds for his personal finances and Harbinger's potentially illegal trading and redemption strategies.
Harbinger Group Phil Falcone
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