Harbinger

Remember, back in 2009, when Phil Falcone loaned himself $113 million from a gated investor fund to pay state and federal taxes? Initially his chief operating officer, Peter Jenson, had tried to convince the Harbinger Capital founder to borrow the money against assets like his townhouse, artwork, St. Barts estate, and interest in the Minnesota Wild.

Unfortunately for Jenson, Falcone decided he’d rather be banned from the securities industry than jeopardize his beloved hockey team and told the COO to look into the just-borrow-from-investors option, ultimately deciding it was the wisest idea. It was at this point that Jenson probably should’ve bowed out instead of going along with the plan, which he’s now paying for. Read more »

A year ago this August, we noted that a brow-beaten Falcone, on a time out from the securities industry and putting out fires daily with regard to his passion project, LightSquared, was just going to start suing everyone. Which he kind of has! In the last 11 months alone, the hedge fund manager has filed lawsuits against: Read more »

Philip Falcone’s Harbinger Capital Partners is again suing Dish Network Corp. DISH +0.78% and Chairman Charlie Ergen, this time under the federal racketeering statute. Harbinger is suing both Mr. Ergen and Dish for at least $1.5 billion, saying Mr. Ergen violated the Racketeer Influenced and Corrupt Organizations Act when he acquired the debt of LightSquared—the wireless venture controlled by Harbinger—as Dish was making a bid for the company. Harbinger says Mr. Ergen’s purchases caused it to lose money and control of the LightSquared board. Mr. Falcone and other Harbinger officials resigned from the board as part of negotiations for a bankruptcy court restructuring. “Ergen and his fellow RICO Enterprise members pursued their abusive scheme through wire, mail and bankruptcy fraud, abuse of process, tortious interference with contract, and obstruction of justice,” Harbinger lawyers said in a filing with U.S. District Court in Colorado. Under RICO, originally designed to prosecute organized crime, parties can seek more damages than is typically allowed. [WSJ, related]

  • 30 May 2014 at 4:11 PM

Phil Falcone Insists FCC Do What He Cannot

Falcone, whose Harbinger Capital hedge fund owns the bankrupt LightSquared, a high-speed wireless start-up, is asking the Federal Communications Commission to take “immediate” action to stem the barrels of red ink flowing from the company. In a letter to the FCC, Falcone is urging the regulator to “mitigate further damage” to Harbinger, which invested $3 billion in LightSquared only to see the agency pull the plug on the company in 2012. On Wednesday, Falcone asked the FCC to take “immediate, positive action” to reverse Harbinger’s losses, according to the letter sent by his legal team. [NYP]

Not just because he’s not Jewish, but also because, according to Dealbook, he’s already got a bitter taste in his mouth. (Which, somewhat surprisingly, has nothing to do with his 5 year ban from the securities industry or Charlie Eregn.) Read more »

Richard Handler’s Leucadia National Corp. (LUK) added $253 million to its investment in Philip Falcone’s Harbinger Group (HRG) Inc., which owns businesses from consumer goods to insurance. Leucadia agreed to buy 23 million preferred securities in Harbinger Group from Falcone’s hedge funds for $11 apiece, Harbinger Group said today in a statement. That brings Leucadia’s total disclosed holding including common shares to $497 million, based on today’s closing price. Falcone, 51, is focused on building his publicly traded Harbinger Group after reaching a settlement with U.S. regulators that bars him from the hedge-fund industry. His Harbinger Capital Partners hedge funds are working to meet redemption requests as part of the August accord with the Securities and Exchange Commission. Falcone said in the statement that he’s pleased with the investment and called the two firms “a great fit.” [Bloomberg]

Two years ago, like a modern day Noah, Nicholas Jacinto arrived at the townhouse of billionaire Phillip Falcone with a menagerie of exotic animals. He carted a sloth, a king snake, a lemur, a marmocet, a hedgehog and a Brazilian aardvark into the hedge fund king’s $50 million Upper East Side home to set up for a birthday party. Jacinto had been hired to provide the entertainment, displaying the rare critters to gawking guests. But before the show could start, city Health Department inspectors swooped in. They ticketed Jacinto, a state and federally licensed wildlife expert, for not having a city permit for the animals, and sent him packing back to his Long Island farm with his tail between his legs. “It was a huge embarrassment what the department did to me,” he recalled. DNAinfo New York, January 21, 2014

Wilbur adjusted the towel around her head. She took a long drag off her Lucky Strike and stared out onto East 67th Street. Phil hated when she smoked in the house, so she’d cracked the bathroom window and had the fan going. But honestly, she didn’t much care what Phil thought right now.

Had she wanted to perform at the children’s birthday? No. Of course not. She wasn’t their monkey and she didn’t do children’s birthdays. But the fact that he’d made the call immediately after their fight felt especially cruel. Things weren’t great with them but she never thought he’d go out of his way to hurt her.

She flicked the rest of her cigarette out the window and stared at her pores in the mirror. Phil used to tease her for spending hours scrutinizing her skin. Lately, though, he hadn’t said anything. Maybe he was no longer paying attention. Maybe he’d noticed the fine lines where things were once smooth, and hoped she would, too. She knew it was ridiculous, but she couldn’t help but feeling like he was trading her in for a new model.

There was a knock at the door. “Wilbur, can I come in?” Phil asked from the other side.

After all of their fights, the big ones and the small ones, no matter what had been said, no matter how many objects were thrown (Wilbur) or how many tears were shed (Phil), they’d always found their way back to each other eventually. Wilbur was still hurting, but she was ready to hear what Phil had to say, ready to move on. In a couple hours the guests would be arriving, and a little while after that they’d sing Happy Birthday and eat cake, and Wilbur would do her standard, “Are you one, are you two, are you three…” In spite of herself, she was actually looking a little bit forward to the animal display.

She opened the door, ready to reconcile. But Phil didn’t come in. He stood at the threshold, without a hint on contrition on his face or in his bearing. There was no sign that he’d been crying at all. Read more »