Hedge Funder Phil Falcone Throws His Lawyer Under The Bus

Hedge funder Phil Falcone sent the following statement to CNBC from his Hamptons home this afternoon following a deal
with the SEC to pay an $US18 million fine and accept a five-year ban from the securities industry.

CNBC’s Kate Kelly reports:

“Harbinger is not closing down. As expected I have to meet customer redemptions but the fund is not going away. I am happy though to get this behind me. Unfortunately I had some poor legal advice along the way and instead of questioning it, I followed it. I look forward to getting on with my life and focus on continuing to build Harbinger Group Inc., the public company.”

Last summer, the SEC charged Falcone and his Harbinger Capital Partners with securities fraud. Specifically, Falcone had borrowed $US113.2 million from Harbinger’s Special Situations Fund to pay his personal state and federal taxes, while blocking the fund’s investors from redeeming their money.

Falcone and Harbinger admitted to wrongdoing, according to the SEC press release.

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