Published June 26, 2012
U.S. securities regulators could file an enforcement action against hedge fund manager Philip Falcone as soon as this week, Bloomberg reported on Tuesday.
The news agency reported that the U.S. Securities and Exchange Commission recently authorized the filing of a lawsuit against Falcone, who notified investors in his Harbinger Capital Partners fund about a year ago that he was being investigated by regulators.
SEC officials did not immediately comment on the report. Falcone could not be reached for comment.
Matthew Dontzin, an attorney for Falcone, issued a statement saying the manager would fight any lawsuit,
The lawyer added that if the SEC filed a lawsuit, any allegations of improprieties against Falcone "are supported neither by the facts nor the law."
The SEC has been investigating a number of issues involving the manager, including a $113 million loan he took from the hedge fund to pay his own taxes. The loan has since been paid back with interest.
Regulators are looking into the trading by the hedge fund in bonds of MAXX Holdings Inc.
Earlier this year, Falcone told investors in his $4 billion fund that U.S. regulators had informed him he may have violated securities laws by engaging in market manipulation in those bonds.
Falcone was at one point the toast of the hedge fund industry largely because of highly lucrative trades he made betting on the collapse of the housing market. But the fund has fallen on hard times after he made a big and audacious bet on a telecom startup called LightSquared which filed for bankruptcy protection in May.