Print this article
Hedge Fund Billionaire Falcone Sued By US For Claims Of Improper Loan For Tax Bill
Tom Burroughes
28 June 2012
Hedge fund manager and billionaire Philip Falcone, who
earned a fortune by speculating on the collapse of the US sub-prime
mortgage market, has been sued by US regulators for allegedly borrowing money improperly
from his fund to pay his tax bill. Falcone is also accused by the Securities and Exchange
Commission of breaching rules by offering major investors preferential
treatment when his hedge fund, Harbinger, was restructured in 2009. He is also
alleged to have illegally manipulated a high-yield bond sale, according to
media reports. The “charges read like a final exam in a graduate school
course in how to operate a hedge fund unlawfully,” said Robert Khuzami, head of
the SEC’s enforcement division. A lawyer representing Falcone, Matthew Dontzin, said the
claims were neither “supported by the facts nor the law” and said the SEC
lawsuit will be vigorously contested.