Phil Falcone Would Appreciate It If Someone Would Write Out An Explicit Set Of Rules Re: What One Can And Cannot Do With Company Funds

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As those of you who keep close tabs on the trials and travails of La Familia Falcone know, one of the biggest mistakes Phil made in the last several years was the time he borrowed $113 million from a gated investor fund to cover personal taxes, for which he had failed to set aside enough cash. Falcone learned the hard way that clients don't take kindly to these sorts of things-- even if you pay them back, with interest-- and that the Securities and Exchange Commission doesn't either. Point taken, all that jazz. In retrospect, it might even make sense to Phil re: why people got upset. Having said that, there is no way he, or anyone for that matter, could have predicted anyone would get their panties in a twist over this:

An investor has accused the hedge fund billionaire Philip A. Falcone of using his publicly listed company “to bail himself out” after a reaching an $18 million settlement with the Securities and Exchange Commission. In the weeks after the S.E.C. settlement last August, Mr. Falcone’s hedge fund Harbinger Capital Partners was confronted with a flurry of requests from investors to return their money, according to a complaint filed by a Harbinger Group shareholder, Haverhill Retirement System. In a desperate attempt to find capital to replace the money flowing out, according to the lawsuit, Mr. Falcone sold some shares in Harbinger Group, where he is chief executive. He later sold additional shares and added two seats to the board of directors, eventually securing a $400 million investment by the Leucadia National Corporation, the suit contends. By doing so, “Falcone effectively used Company assets to bail himself out of a personal financial crisis,” the complaint said.

Falcone Accused of Using Company Assets in Cash Crunch [Dealbook]

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Who Wants To Invest In Phil Falcone's New Company?

Harbinger Global Corp is coming to an exchange near you. Phil Falcone, the embattled billionaire hedge fund manager, has put together an unorthodox IPO that will see his hedge fund firm contribute assets valued at $350 million to a blank check company that will trade publicly. In the deal, a special purpose acquisition company that is expected to trade on Nasdaq and be known as Harbinger Global Corp., will acquire a majority interest in an MGM-branded hotel and casino development in Vietnam and a minority interest in an iron ore producer working in Brazil. Funds run by Falcone’s Harbinger Capital Management that are contributing the assets will get an ownership stake that could be as high as 96% in Harbinger Global and Falcone is slated to become executive chairman of the company. Falcone’s move to become closely involved in a publicly-traded company is audacious given that he is currently facing securities fraud charges from the Securities & Exchange Commission. Yeah, well, people also thought it was audacious for him to invite a burlesque dancing pig he barely knew to come and live with him and she turned out to be the best thing that ever happened to him, so.