Phil Falcone Would Like To Clear Up A Few Things


The last month or so has not been the best of times for Phil Falcone. Harbinger Capital's flagship is down, Goldman Sachs, Blackstone and some others have pulled their money, investors have been giving him shit for borrowing $113 million from one of his funds (where redemptions had been frozen) in order to pay personal taxes, he had to put up his art as collateral to borrow even more cash (for what, it's unclear), he's being investigated by the SEC and every time he drives down the road he just wants to jerk the wheel into a god damn bridge abutment.

First, though, he'd like to put some rumors to bed, and in a profile with the Times yesterday, did just that.

* On the hideous suggestion he's got a liquidity problem:

Mr. Falcone has been selling investments. He has unloaded stakes in Citigroup and The New York Times Company and a $650 million investment in Inmarsat, a British satellite company. All of this has led to speculation in the hedge fund community that Mr. Falcone and his firm are confronting a cash squeeze. If more investors withdraw money, the whispers go, Mr. Falcone could be in trouble. Nonsense, said Mr. Falcone in an interview in his office. “The last thing I’m thinking about in the morning is whether I have a cash-flow problem,” he says.

* On people not getting that he loaned himself investor money because he really needed it and not because he was just dicking around.:

A little more than a year ago, Mr. Falcone took a $113 million personal loan from the fund, a move that was vetted by his lawyers, he said. Mr. Falcone said a big chunk of his personal wealth is tied up in his own funds. “It’s not like I have $113 million in my checking account,” he said, chuckling.

* On whether or not he'd do it all over again:

“In 20/20 hindsight, I regret being in this position,” he said, leaning forward on the sleek black conference table and clasping his hands together. “This has not been a fun process.”

* On his singing and dancing pig's name, which some press accounts have wrongly claimed is 'Pickles':

Ms. Falcone turned heads with a Prada sensibility and her pet pig, Wilbur.

* On whether or not all this has him freaking the fuck out:

Mr. Falcone has adopted a rather grounded outlook on the ups and downs of hedge funds, including his own. “You can’t go through this business and think every day is going to be a winning day,” he said.

So, just, everybody chill. Phil's good, Lisa's good, Harbinger's good, and tonight, we will dance.


Securities And Exchange Commission Still Hung Up About The Time Phil Falcone Borrowed Money From A Gated Fund To Pay Personal Taxes

Remember the time Harbinger Capital Partners founder Phil Falcone was a little short on cash, and decided to "borrow" $113 million from a fund in which redemptions had been suspended in order to pay personal taxes? Unfortunately for Big P, the SEC does. (The regulator also recalls he time he allegedly played favorites with Goldman and allegedly manipulated some markets.) Philip Falcone, the billionaire founder of Harbinger Capital Partners LLC, faces a lawsuit from U.S. regulators as soon as this week over claims he improperly borrowed client funds to pay his taxes and gave preferential treatment to Goldman Sachs Group Inc., according to two people familiar with the matter. Falcone, 49, may also face a market manipulation claim related to trading in bonds of MAAX Holdings Inc., said the people, who asked not to be identified because the matter isn’t public. The Securities and Exchange Commission voted to authorize enforcement staff to file the case, the people said. While perhaps not the best news Falcone has received in a while, it likely does not come as a surprise, as the SEC has been talking about the aforementioned offenses since last December (when they tried to get him banned from the securities industry). Either way, Phil, who should probably just not going home tonight unless he wants an earful, is planning to "contest to the suit." SEC Said To Authorize Lawsuit Against Harbinger’s Falcone [Bloomberg]