Fund chief Falcone handed fine, ban

AFP-JIJI

Hedge fund star Philip Falcone agreed to an $18 million fine and a five-year ban to settle charges that he tapped fund assets to pay his taxes, the Securities and Exchange Commission said Monday.

The SEC said Falcone and his Harbinger Capital Partners agreed to admit guilt in the 2012 case, in which the SEC accused Falcone of improperly using $113 million in assets from his hedge funds to pay his own taxes.

Falcone, who raked in billions in 2007 betting against packaged mortgage securities ahead of the U.S. real-estate crash, admitted to “multiple acts of misconduct that harmed investors and interfered with the normal functioning of the securities markets,” the SEC said.

In addition to raiding client funds to make his tax payments, the SEC said Falcone had given preferential treatment to investors who supported a controversial Falcone-backed board initiative on one Harbinger fund.