Overview
The SEC today announced a settlement with hedge fund Harbinger Capital and its manager, Philip Falcone, under which the defendants will pay $18 million in fines and Mr. Falcone will be barred from the securities industry for at least five years. The defendants also admitted to certain wrongdoing, including making personal loans to Mr. Falcone at favorable rates, and undertaking a "short squeeze" to retaliate against Goldman Sachs. The SEC had previously voted to reject a settlement in principle that the SEC enforcement staff had reached with the defendants. The prior settlement included a similar fine, but Mr. Falcone would have been barred from the securities industry for only two years (not five) and there would have been no admission of wrongdoing. Our prior posts on the case are here.
