Philip Falcone's rags-to-riches story was one of the most talked-about in the hedge fund industry during the last decade and now the Minnesota boy whose bets against the US mortgage market made him a multi-billionaire, is causing jaws to drop all over again.
But only because he might have just made one of the most costly mistakes in the industry's history.
Despite billions of dollars of investment and years of preparatory work, his plan to launch a nationwide, wireless broadband network has been blocked by US regulators. They ruled on Tuesday that it would cause interference with the proliferating number of GPS systems in use already, including some vital to airline safety.
The future of the venture, called LightSquared, is now in doubt, and the financial consequences for Mr Falcone could be dire.
His hedge fund, Harbinger Capital, has gone "all in" on LightSquared's success, sinking $3bn (£1.91bn) into the company. Around 60 per cent of its assets are invested in the company, an extraordinarily high concentration.
Many of Harbinger's other assets are also illiquid, making it difficult for Mr Falcone to deal with any redemption requests from outside investors who might want to pull their money out. Already, he has had to fess up to a 47 per cent drop in the value of Harbinger's assets last year, largely because of a write-down in the value of LightSquared, and a fund that was managing $28bn at its height in 2008 was worth just $4bn at the end of 2011.
Worse, Harbinger just took out a short-term loan at sky-high interest rates to tide it over until the government ruled on LightSquared's plans. That loan, from the broker Jefferies, raised eyebrows last week because the interest rate of 15 per cent is around three times what even junk-rated companies pay, and higher than US consumers' credit cards.
Now Harbinger is racing to sell other assets to cover the debt, while LightSquared has to decide whether to file for bankruptcy or raise more cash to rethink its plans.
The problem is that LightSquared has bought up parts of the radio spectrum – and partnered with UK-listed Inmarsat which has spectrum in the same area – that are next to existing GPS services. It also needs to use a particularly strong, land-based signal to make wireless broadband work. Given the imprecision of GPS receivers, which stray into LightSquared's territory, even its promise to use only the low end of its spectrum has not allayed concerns.
Though a furious LightSquared says GPS companies should learn to stay in their part of the spectrum, the Obama administration concluded that "there is no practical way to mitigate the potential interference at this time".
LightSquared said the government's conclusions "disregard more than a decade of regulatory orders, and in doing so, jeopardise private enterprise, jobs and investment in America's future".
For the 49-year-old Mr Falcone it is a bitter blow. He has been an evangelist for mobile broadband since before he joined the ranks of mega-rich hedge fund managers in 2007. That was the year he personally made an estimated $1.7bn, when the US mortgage market collapsed under the weight of toxic sub-prime loans.
The former professional hockey player-turned-junk bond trader recounts with pride his journey from humble beginnings. He was one of nine children living in a three-bedroom home in Minnesota, his father a utility superintendent and his mother working in a local shirt factory, and he attended Harvard University on financial aid.
Forbes magazine briefly ranked him among the 500 richest people in the world, with a fortune of $2bn, though his stake in Harbinger is believed to have dipped below $1bn now.
The precarious future of LightSquared now puts even that in jeopardy. The venture said it has just several quarters worth of cash left and its network partner, Sprint Nextel, had given it a mid-March deadline to win regulatory approval for its network.
And there are further problems in the works for Mr Falcone. The Securities and Exchange Commission (SEC) told him in December that it expects to sue him and other people affiliated with Harbinger, though no suit has so far been filed and it is unclear exactly what the regulator has found.
So Mr Falcone is in a spotlight now every bit as intense as when he first stepped onto the stage during the credit crisis. The next few months will tell how his story plays out, and whether it is a case of rags to riches to rags again.