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Hedgie fined $18m and banned for using fund assets to pay taxes
by Dylan Lobo on Aug 20, 2013 at 08:20
Hedge fund manager Philip Falcone has been fined $18 million (£11.5 million) and banned for five years for using his fund’s asset to pay personal taxes.
Falcone and his advisory firm Harbinger Capital Partners reached an agreement with US Securities and Exchange Commission last night.
It is alleged that Falcone used $113 million of fund assets to pay the taxes and secretly favoured certain customer redemption requests at the expense of other investors.
‘Falcone and Harbinger engaged in serious misconduct that harmed investors, and their admissions leave no doubt that they violated the federal securities laws,’ said Andrew Ceresney, co-director of the SEC’s division of enforcement.
‘Falcone must now pay a heavy price for his misconduct by surrendering millions of dollars and being barred from the hedge fund industry.’
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