Ex-Harbinger COO Settles With SEC For Hitching Wagon To Falcone-Shaped Star

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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.

Ex-Harbinger COO settles SEC claims he aided fraud [Reuters]

Earlier: Phil Falcone Can Now Devote Himself Full Time To Building A Low-Cost Wireless Network That’s Going To Blow Your Mind

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Phil Falcone Is Turning His Life Around

To put it lightly, the last couple years have been a rather dark time for Phil Falcone. Though his woes are too numerous to mention in full, they include: the adversity he's faced in getting people to believe in LightSquared; his unbelievably pissy investors, who still aren't over the time he borrowed $113 million from a gated fund to pay personal taxes, or offered to pay out redemptions in illiquid LightSquared equity; the Securities and Exchange Commission, which wants him banned from the industry for life; the woman who once offered a respite from it all, who now won't even come out of her room when she knows he's home; and, of course, the plunging returns in his once highly profitable hedge fund. It would be enough to make a grown man say 'Fuck, it. I'm done.' Put a few things in a sack, tie it to the blade of a hockey stick, and hitchhike back to Minnesota. But Phil didn't do that and now? After a merciless storm of shit that felt like it would never ease up? After long days of investors and regulators breathing down his neck and nights of having to pound on the front door because he was accidentally purposely locked out of the house? The tide feels like it's turning for Philip Falcone. Beleaguered hedge fund honcho Phil Falcone’s big bet on his own publicly traded entity, Harbinger Group, is helping to lift his troubled hedge fund, Harbinger Capital Management, out of the deep end. Falcone’s flagship fund posted returns of 10.6 percent in July and a whopping 28 percent gain in June. Of course, he's still down 5.8 percent year-to-date, and the the director of the SEC's division of enforcement wants hedge fund graduate schools to use Harbinger as a case study during the unit on "how to operate a hedge fund unlawfully," but tonight? Tonight he tells Lisa to treat herself to something nice. Tonight he tells Wilbur to pull the baby grand out of the closet, where it's sat untouched for months. Tonight his key works in the lock. Tonight we dance. Phil Helps Himself [NYP]