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.
The former chief operating officer of Philip Falcone's hedge fund Harbinger Capital Partners has agreed to pay $200,000 to resolve charges he aided a scheme to misappropriate fund assets, the U.S. Securities and Exchange Commission said Monday. The SEC said Peter Jenson also agreed to admit wrongdoing as part of the accord, which would resolve a lawsuit the SEC launched in 2012 against him, Falcone and Harbinger. The deal follows an $18 million settlement in August 2013 with Harbinger and Falcone, who agreed to a five-year ban from the financial industry and admitted wrongdoing as part of the pact. Filed in 2012, the lawsuit accused Jenson of aiding and abetting Harbinger and Falcone in a scheme to misappropriate $113.2 million in order to pay the hedge fund manager's personal taxes.
"Jenson assisted a fraudulent scheme that allowed Falcone to put his own interests ahead of investors by engaging in a related party loan on favorable terms," said Julie Riewe, co-chief of the SEC enforcement division's asset management unit. As part of the deal, Jenson also agreed to be barred for at least two years from working in the securities industry and from working as an accountant for a publicly traded company.