U.S. SEC, Philip Falcone reach new settlement deal after first rejection

August 19, 2013

NEW YORK, Aug 19 (Reuters) - Billionaire fund manager Philip Faclone agreed to a five-year ban from the financial industry and will admit wrongdoing to settle charges by the U.S. Securities and Exchange Commission that he improperly used money from his hedge fund and unfairly favored some of his investors, the SEC announced on Monday.

The new settlement agreement between Falcone and his hedge fund, Harbinger Capital, and the SEC comes after the Commission rejected an earlier proposal because it was too lenient.

As part of the agreement, Falcone will have to personally pay around $11.5 million in disgorgement and fines, while Harbinger Capital will pay $6.5 million, according to the SEC’s announcement.

Falcone will be banned from associating with brokers, dealers, investment advisors and other types of financial firms for five years, after which he will be able to reapply for a license to operate. During that period he will be allowed to help with the liquidation of Harbinger under the supervision of an independent monitor, the announcement said.

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