surged 17% a day after distressed investor Harbinger Capital Partners said it took a big stake in the troubled lender.
Harbinger owns 7 million shares, or 9%, of Fremont General, according to a filing with the
Securities and Exchange Commission
. Schedule 13G filings indicate that while an investor is acquiring more than 5% of a company, it intends to be a passive investor.
The filing disclosed Harbinger's positions in Fremont as of Sept. 26 -- the same day that Fremont revealed that another investor group, led by banking executive Gerald J. Ford, was looking to get out of an $80 million investment in the company.
Fremont, which earlier this year consented to a cease-and-desist order from the Federal Deposit Insurance Corp. that forced it out of residential subprime lending, agreed in May to sell its commercial loan business to
for $1.9 billion in cash. In conjunction with the deal, the company said that an investor group led by Ford would take control of the company and its retail bank.
Fremont previously said it was selling its residential real estate business to Ellington Capital Management.
An outside spokesman for Fremont declined to comment on Wednesday on the Harbinger stake or on the Ford negotiations.
Shares of Fremont were up 62 cents to $4.38.