ABC – A prominent hedge fund that made huge gains betting against subprime mortgages is reportedly being investigated by federal authorities for extending a $113 million loan to its founder so he could pay off a personal tax bill.
The Wall Street Journal reported Saturday that the Securities and Exchange Commission and the U.S. Attorney’s office in Manhattan are investigating the fund, Harbinger Capital Partners. Authorities are questioning whether the fund told investors quickly enough when it extended the loan to founder Philip Falcone last year, according to the Journal.
