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Phil Falcone Pays Back Loan He Took From Investors To Pay Personal Taxes

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Several months back, it came to light that Phil Falcone had loaned himself some $113 million from one of Harbinger's funds to pay personal taxes. He didn't tell anyone about it at the time because he hadn't thought it was that big a deal but when investors finally heard about it in November, it turned out they were mighty pissed. Goldman and Blackstone pulled their entire investments from the flagship fund and even though they should've take the loan as a postive sign (Falcone pays his taxes! Not everyone does that!), a bunch of clients feared it was a harbinger of not very good moments to come (some where also miffed about the fact that the loan was taken from a fund in which redemptions had been suspended). We too were a bit worried and couldn't help but going to the dark place in which Wilbur, the Falcone's piano-playing pig was laid off, Lisa had to sell the crown jewels of her wardrobe (including The Gladiator, Mermaid Chic, and Slutty Peacock, and the couple's bar-in-closet could no longer stock top shelf liquor. The whole thing was very stressful, so today's news brings some sweet relief.

Philip Falcone recently rid himself of a headache when he paid off the balance of a controversial $113 million loan he had taken from his hedge fund, public records reveal. On March 11, lawyers for Falcone's Harbinger Capital Partners filed a formal "termination" notice for the loan with the New York State Department of Corporations. The termination notice removes a lien the hedge fund had placed on some of Falcone's assets at the time the loan was arranged in October 2009. Liens are terminated when a debt is paid.

Everyone can breathe a collective sigh of relief, especially Wil, who's so happy about this news has said he'll do some Bette Midler tonight, should anyone request it.

Falcone Pays Back Hedge Fund Loan [Reuters]


Phil Falcone Maintains 'Absolute Lawfulness' Of Lending Himself A Hundred Mill From Investor Fund

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/have a judge rule he can't come within 200 feet of a public company sorry), sorry, 'cause Phil's not sorry.

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]

Phil Falcone Will Borrow Hundreds Of Millions Of Dollars From Any Gated Investor Fund He Pleases

Phil Falcone, as some of you may know, has made some mistakes in the last couple years. Pouring his investors' money into a wireless start-up that may or may not ever get off the ground. Offering those who wanted out illiquid LightSquared equity instead of cash. Not getting his wife a driver for party-time.  If you're wondering why we haven't mentioned the time he borrowed $113 million from a gated fund in order to pay personal taxes, which he had not set aside enough money to cover, it's because Phil doesn't count it as a mistake, regardless of what you, or the SEC, or anyone else says. Hedge-fund manager Philip Falcone and his firm, Harbinger Capital Partners LLC, formally signaled their intent to seek the dismissal of fraud charges filed against them earlier this year by securities regulators, according to people familiar with the case. In June, the Securities and Exchange Commission filed civil charges accusing Mr. Falcone of putting his own interests, including maintaining a "lavish lifestyle," ahead of those of Harbinger's investors. The agency accused Mr. Falcone, Harbinger and Harbinger's former operating chief, Peter Jenson, of misleading investors and an outside law firm when Mr. Falcone took out a $113.2 million loan in 2009 from a Harbinger fund to pay his personal taxes, even as other investors in the fund were prevented from pulling their money. Lawyers for Mr. Falcone and Harbinger sent a letter to Judge Paul Crotty of U.S. District Court in Manhattan Friday, the deadline for responding to the SEC's complaint, saying they intended to seek dismissal, the people said. The letter also summarized arguments for the dismissal. Mr. Jenson also filed a letter Friday through his lawyers saying he intended to seek dismissal of the complaint. Representatives of Mr. Falcone and Harbinger have said before they planned to fight the allegations. In negotiations with securities regulators leading up to the charges, they had argued that Mr. Falcone and Harbinger were simply following sound advice from their legal counsel. Which, for those who missed it, was: “[L]ending money to principals is not part of the fund’s investment program” and "a loan . . . will never be a good idea" and "[We are] unequivocally against the loan idea for a number of reasons." Falcone To Seek Case's Dismissal [WSJ] Earlier: Phil Falcone’s Alleged Piggish Behavior Made Him Some Enemies