Falcone agrees to 5-year industry ban
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Tuesday 20 August 2013
Philip Falcone, the billionaire investor behind the Harbinger Capital hedge fund, has agreed to a five-year ban from the financial industry as part of settlement with US regulators over charges that he misused money from the fund and secretly favoured some clients at the expense of others.
Mr Falcone and Harbinger, which was among the funds that shorted HBOS stock during the financial crisis, have also agreed to a pay fine of more than $18m. The deal, which was announced by the US Securities and Exchange Commission (SEC) last night, comes after an earlier proposal was rejected by the regulator’s commissioners, reportedly because of concerns that it was too lenient. “Falcone and Harbinger engaged in serious misconduct that harmed investors,” Andrew Ceresney, the co-director of the SEC’s enforcement arm, said.
The settlement, which needs to be approved by a New York court, will do little to dent Mr Falcone’s net worth, which has been estimated at $1.2bn by Forbes magazine. But it marks a spectacular fall for the tycoon, who as part of the deal has admitted to improperly borrowing around $113m from a Harbinger fund at an interest rate less than that being paid by the fund itself to meet his personal tax obligations.
The loan was taken out at a time when Mr Falcone had “barred other [fund] investors from making redemptions, and did not disclose the loan to investors for approximately five months,” the SEC said.
Emergency call 'started off dumb, but got pretty serious'
Argentinian scored 'rabona' wonder goal for Tottenham in Europa League – see it here
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Watch what happened when food critics were unknowingly served McDonald's
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
- 4 Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo
- 5 Of course, teenage girls need role models – but not like beauty vlogger Zoella
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
FCKH8: Provocative anti-sexism video showing young girls swearing reinstated by YouTube
Diwali: What is the festival of lights – and how is it celebrated around the world?
Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
Competitive (DOE): Guru Careers: A COO / Chief Operating Officer is needed to ...
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
120-150k: Accountancy Action: We are looking for an experienced CFO from a min...