Remember, back in 2009, when Phil Falcone realized he’d forgotten to set aside enough cash to cover his taxes and came up with the idea to loan himself the money from a gated investor fund? And investors got all bent out of shape about it and the SEC did too? If the former was looking for some sort of an apology and the latter was looking for some show of groveling (in an attempt to avoid paying a fine/having a judge rule he can’t come within 200 feet of a public company), sorry, ’cause Phil’s not sorry.
Lawyers for Mr. Falcone and Mr. Jenson, the firm’s former chief operating officer, said there was nothing improper about the loan. “Our position is the loan was absolutely lawful,” said Matthew Dontzin, a lawyer for Mr. Falcone, who also said the loan was eventually repaid with interest.
Falcone also maintains he didn’t manipulate the bathroom fixtures market.
…the SEC alleged that Mr. Falcone and two investment managers he controls manipulated the prices of bonds of MAAX Corp., a maker of bathroom fixtures. The SEC says Mr. Falcone bought up more than all of the bonds in question, causing traders who were betting against the bonds to have to cover their negative bets by buying them back at artificially high prices. Mr. Falcone was able to buy more than the entire issuance of the bonds because they were bought from “naked” short sellers, or sellers who sold the bonds without actually owning them, the SEC said. Tibor Nagy, a lawyer for Mr. Falcone, didn’t dispute that Mr. Falcone purchased the bonds. However, he said there was nothing illegal in Mr. Falcone’s actions, including buying up more than the entire supply of MAAX Corp. bonds. “It’s a perfectly lawful transaction,” Mr. Nagy said.
Falcone To Judge: ‘I Did Nothing Wrong’ [WSJ]
Related: a Law Firm B partner told Harbinger in a separate e-mail that it would “never be comfortable with this . . . a loan . . . will never be a good idea.”