The Debacle Continues: LightSquared CEO Charged With Fraud
June 28, 2012 11:26 AM
comment(s) - last by
The SEC accuses LightSquared chief of loaning himself over $100M USD to pay his personal taxes
Things have been going downhill fast for Philip Falcone. Mr. Falcone, a
dedicated donor to President Obama
, narrowly missed successfully using his monetary interest on the White House to push through a satellite LTE bid in the face of
disastrous interference concerns
U.S. Federal Communications Commission
ruled that Mr. Falcone's satellite scheme
was a no-go
given its potential to cripple U.S. defenses. In the wake of that rejection, LightSquared
filed for bankruptcy
Now there's more bad news for Mr. Falcone. He stands
[press release] of various misdeeds involving his hedge fund -- Harbinger Capital Partners -- which helped finance the LightSquared bid.
According to the
U.S. Securities and Exchange Commission
, Mr. Falcone illegally colluded with large investors to make it easier for them to take money out of the hedge fund, but harder for small investors to do so. By cutting these deals and gaining the shareholder votes he need to institute this plan, the SEC alleges that Mr. Falcone enabled himself to commit yet another crime -- illegally scooping $113.2M USD from the hedge fund to pay his personal taxes.
Philip Falcone, one a venture capital wizard, has lost over half his fortune. Now he stands accused of stealing his investors' money to pay his taxes and manipulating bonds.
[Image Source: Jacob Kepler/Bloomberg/Getty Images]
He also stands accused of a third offense -- bond manipulation. The accusation is that Mr. Falcone artificially inflated high-yield bond prices in order to make it impossible for short-sellers to making a profit, despite bond prices falling.
As with many financial figures charged by the SEC, the cause of Mr. Falcone's fall from grace likely lies less from his decision disenfranchising small investors (although they did), but more due to the fact that some of his tactics -- like artificially dealing losses to short sellers -- began to hurt large institutional investors as well. Once that happened, Mr. Falcone found he neither had friends in high nor low places.
Matthew Dontzin, lawyer to the billionaire,
The Wall Street Journal
that claims the SEC's charges are "without merit and will all be vigorously defended in the courthouse."
Mr. Falcone was recently
to be worth $1.1B USD, having lost approximately half of his $2.2B USD fortune on the LightSquared bid. Mr. Falcone is 49 and resides in New York City. He is an investor in the Minnesota Wild National Hockey Leage (NHL) team, according to
SEC [press release]
[PDF; Charges [1 of 2]]
[PDF; Charges [2 of 2]]
This article is over a month old, voting and posting comments is disabled
RE: Given how the Wild are doing...
6/28/2012 1:17:55 PM
Before I start a hockey fight and we all get 10 minutes for it, I don't dislike the Wild but I do think they shoulda been called the Moose!
That being said, I hope this guy gets what he deserves.
RE: Given how the Wild are doing...
6/28/2012 2:56:04 PM
I went to a fight one time, and a hockey game broke out....
"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
Game Over: LightSquared Goes Bankrupt
May 14, 2012, 7:44 PM
LightSquared's GPS-Crippling 4G Bid is Sunk by the FCC
February 15, 2012, 1:18 PM
Bribes and LTE: the Bizarre Case of LightSquared, Obama, and the USAF
January 24, 2012, 1:25 PM
LightSquared Wireless Service Signals Interrupt 75 Percent of GPS Receivers
December 12, 2011, 1:00 PM
Quick Note: Toshiba to Restructure PC Business, Cut 900 Jobs Worldwide
September 18, 2014, 1:40 PM
Samsung Galaxy Note 4 U.S. Pre-orders Start Sept 19, Launches Oct 14
September 18, 2014, 10:15 AM
Amazon Releases New and Refreshed Kindle Fire Tablets, Announces Fire OS 4
September 17, 2014, 10:23 PM
Apple Launches iOS 8 for iPads, iPhones
September 17, 2014, 1:54 PM
Apple Cripples NFC in iPhone 6, 6+ With Developer Ban
September 17, 2014, 1:00 PM
5.7" ZTE ZMAX "Phablet" Coming to T-Mobile Sept 24 for $252
September 17, 2014, 11:50 AM
Most Popular Articles
Quick Note: Buy an Xbox One Sept 7-13, Get a Free Game
September 4, 2014, 10:42 AM
Apple Announces Its Smartwatch: The $349 Apple Watch
September 9, 2014, 2:09 PM
Dell Announces "World's Thinnest" Tablet: The Venue 8 7000 Series
September 11, 2014, 8:51 AM
Windows 9's Latest Metro Start Menu Leaks, German Site Accidentally Outs Leaker
September 11, 2014, 8:36 PM
T-Mobile Launches Un-carrier 7.0, Beefs Up Wi-Fi Calling
September 11, 2014, 2:56 PM
Latest Blog Posts
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information