MANHATTAN (CN) - Hedge fund adviser Philip Falcone and his company Harbinger Capital Partners agreed to pay $18 million and admit wrongdoing, the SEC said Monday.
The SEC accused Falcone and his company of "misappropriation of client assets, market manipulation, and betraying clients," the agency said when it filed an enforcement action against them in 2012.
That lawsuit claimed that Falcone "improperly used $113 million in fund assets to pay his personal taxes, secretly favored certain customer redemption requests at the expense of other investors, and conducted an improper 'short squeeze' in bonds issued by a Canadian manufacturing company," the SEC said Monday in a statement announcing the settlement. It added: "In the settlement papers filed in court today, Falcone and Harbinger admit to multiple acts of misconduct that harmed investors and interfered with the normal functioning of the securities markets."
Falcone also will be barred from the hedge fund industry for 5 years.
The settlement was unusual in that the SEC seldom makes alleged financial crooks admit wrongdoing - a policy that has been criticized since the 2008 worldwide financial meltdown.
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