KQNC 88.1 in Quincy is currently off the air. We're working to restore service as soon as possible. Thank you for your patience.

 We Get Support From:
Become a Supporter 
 We Get Support From:
Become a Supporter 

SEC Bans Falcone From Trading For 5 Years

By Richard Gonzales | NPR
Tuesday, August 20, 2013

Copyright 2018 NPR. To see more, visit http://www.npr.org/.

Hedge Fund manager Phillip Falcone has agreed to pay an $18 million fine. As part of a settlement with the Securities and Exchange Commission, Falcone also agreed to a five-year ban from the securities industry.

Transcript

DAVID GREENE, HOST:

Back in this country, a major hedge fund manager, Philip Falcone and his company, Harbinger Capital Partners, have agreed to pay $18 million to settle charges over the improper use of his company's money.

As NPR's Richard Gonzales reports, Falcone is also barred from the securities industry for five years.

RICHARD GONZALES, BYLINE: The charges come from the Securities and Exchange Commission. It accused Falcone of improperly using $113 million in fund assets to pay his personal taxes. He was also accused of secretly allowing certain investors to cash out their holdings while not allowing others to do so. Finally, federal regulators said he manipulated the market for bonds issued by a Canadian manufacturing company.

Under the terms of the settlement, Falcone and his firm must admit their wrongdoing. That requirement is a departure from past SEC practice, which allowed financial firms and their employees to pay a fine without admitting guilt. That admission is a first under the new chairwoman of the SEC, Mary Jo White, who has made those admissions a priority.

The settlement comes after SEC commissioners rejected another proposal, which would not have required Falcone to admit wrongdoing and would have barred him for only two years.

Richard Gonzales, NPR News. Transcript provided by NPR, Copyright NPR.

View this story on npr.org

Sign up for ReCap

and never miss the top stories

Delivered to your inbox every Wednesday.

Check out a sample ReCap newsletter.