{"id":35410,"date":"2013-05-10T09:20:12","date_gmt":"2013-05-10T13:20:12","guid":{"rendered":"http:\/\/www.hedgeco.net\/news\/?p=35410"},"modified":"2013-05-10T09:45:02","modified_gmt":"2013-05-10T13:45:02","slug":"hedge-fund-fraud-falcone-to-pay-sec-18-million","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/05\/2013\/hedge-fund-fraud-falcone-to-pay-sec-18-million.html","title":{"rendered":"Hedge Fund Fraud: Falcone To Pay SEC $18 Million"},"content":{"rendered":"

\"falcone_9.19.11\"<\/a>New York (HedgeCo.Net) – Without\u00a0admitting\u00a0or denying the SEC\u2019s allegations,\u00a0Philip Falcone and his hedge fund Harbinger Capital Partners\u00a0have agreed to pay $18 million and will\u00a0be barred for two years from working as an investment adviser or broker.<\/p>\n

“The SEC alleged in its lawsuit that from 2006 through early 2008, Falcone manipulated the market for high-yield, high-risk bonds issued by a company called 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 asserted.” The Washington Post reported.<\/em><\/p><\/blockquote>\n

The SEC also said that\u00a0Falcone and Harbinger secretly offered and granted favorable redemption and liquidity rights to certain strategically-important investors in exchange for those investors\u2019 consent to restrict redemption rights of other fund investors, while concealing the arrangement from the fund\u2019s directors and investors.<\/p>\n

\u00a0“The S.E.C. also took aim at Mr. Falcone for taking a $113.2 million loan from his fund to pay his own tax bill in 2009. He borrowed the money, the S.E.C. said, at a time when the fund had blocked investor redemptions and then kept the deal secret for five months.”\u00a0The NYT said.<\/em><\/p><\/blockquote>\n

The SEC also alleges that:<\/p>\n