NEW YORK (AP) — 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. 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.
The SEC also accused Harbinger of manipulating the market for bonds issued by a Canadian manufacturing company, Maax Holdings Inc. Using fund money, Falcone bought many of the bonds to shrink the supply on the market and drive up prices, the SEC said.
It was a move meant to retaliate against another financial firm rumored to be betting that the price of the bonds would fall.