NEW YORK —Hedge fund titan Phil Falcone and his firm, Harbinger Capital Partners, will pay $18 million to settle Securities and Exchange Commission charges over Falcone’s use of firm money and other accusations, regulators said Monday.
Falcone and his firm must also admit wrongdoing, a departure from many recent SEC settlements that have allowed financial firms and employees to neither admit nor deny guilt. Falcone is also barred from the securities industry for five years.
This was not Falcone’s first attempt to settle the SEC charges. At a closed meeting last month, SEC commissioners rejected another settlement proposal. It was also worth $18 million, but it did not require admission of guilt and would have banned Falcone from the industry for only two years.
“Falcone and Harbinger engaged in serious misconduct that harmed investors, and their admissions leave no doubt that they violated the federal securities laws,” said Andrew Ceresney, co-director of the SEC’s enforcement division. “Falcone must now pay a heavy price for his misconduct … “
The SEC last year accused Falcone of improperly borrowing $113 million of Harbinger’s assets to pay his personal taxes, at a time when he had barred investors from cashing out.
