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
This is what theft looks like today
6/28/2012 5:44:58 PM
Theft of $113.2M, you say?
Life in prison.
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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: Moto X Gets Mad for the Month of March
March 7, 2014, 5:14 PM
Staples Closing 225 Stores Across North America
March 7, 2014, 1:24 PM
HP Launches $170, 8" Android Tablet
March 7, 2014, 8:09 AM
Sony Computer Entertainment America CEO Jack Tretton Stepping Down
March 6, 2014, 8:52 PM
Apple Won't Let UK Sons Unlock Their Deceased Mother's iPad
March 6, 2014, 12:44 PM
Benchmarks for NVIDIA Tegra K1 Hit the web
March 6, 2014, 8:57 AM
Most Popular Articles
Facebook Kills Popular Messenger App for PCs
March 1, 2014, 4:01 PM
Mt. Gox Bitcoin CEO Can't Stifle Grin as he Bows in Apology for Bankruptcy
February 28, 2014, 5:00 PM
Bitcoin King: Mt. Gox CEO Mark Karpelès' History of Arrests, Firings
March 5, 2014, 9:05 AM
Two More Microsoft Executives Leaving the Company
March 3, 2014, 4:38 PM
USAF Moves Forward With Long Range Bomber Program Despite Budget Crunch
March 4, 2014, 9:44 AM
Latest Blog Posts
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
Is The Period Becoming an Expression of Anger?
Nov 26, 2013, 2:02 PM
NSA and Congress -- You Will Never Kill the Constitution, It's an Idea
Nov 10, 2013, 2:00 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information