Harbinger charges highlight investor redemption angst
Thu Jun 28, 2012
The US Securities and Exchange Commission filed fraud charges
this week against Philip Falcone and his advisory firm
Harbinger Capital Partners for conduct that allegedly
included misappropriation of client assets, market
manipulation and client betrayal.
According to regulators, instead of paying his personal
taxes with his own assets, Falcone obtained $113.2 million
from a hedge fund that he and Harbinger managed during a
period when Harbinger had precluded investors in the fund
from redeeming their interests. Investor approval was not
sought or obtained for this related party transaction, the
SEC says in its complaint. The transaction was structured as
a loan with a highly favourable interest rate that was
ISSN: 2151-1845 / CDC10004H
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