SEC Enters Final Judgment against Philip A. Falcone and Harbinger Partners (with Lofchie Comment)

The SEC announced that the U.S. District Court for the Southern District of New York entered final judgements against Philip A. Falcone, Harbinger Offshore Manager, L.L.C., Harbinger Capital Partners Special Situations GP, L.L.C., and Harbinger Capital Partners LLC in two related actions. The SEC filed enforcement actions in June 2012, alleging that Mr. Falcone improperly used $113 million in fund assets to pay personal taxes, secretly favored certain customer redemption requests at the expense of other investors, and conducted an improper "short squeeze" in bonds issued by a Canadian manufacturing company. In the settlement, Mr. Falcone and Harbinger have admitted to multiple acts of misconduct that harmed investors and interfered with the normal functions of securities markets. The final judgment bars Falcone from the securities industry for at least five years. In addition, Falcone and his advisory firm, Harbinger Capital Partners, agreed to a settlement in which they must pay more than $18 million in disgorgement and penalties and admit wrongdoing.

Lofchie Comment: As noted in our comment to the related news story linked below, what is really notable about this settlement is that Mr. Falcone was required to admit to certain facts as a condition of settlement.

See: SEC Litigation Release.Related News: Philip Falcone and Harbinger Capital Consent to the SEC's Findings and Sanctions (with Lofchie Comment) (August 19, 2013).