US regulators sued hedge fund billionaire Philip Falcone for fraud Wednesday, accusing him of taking $113 million from a fund to pay his taxes.
The Securities and Exchange Commission (SEC) said Falcone, who raked in billions betting against packaged mortgage securities ahead of the US real-estate crash, took clients' money from funds run by his Harbinger Capital Partners to pay his personal taxes.
It also said Falcone illegally manipulated bond prices, traded preferential treatment to investors who backed a controversial board initiative, and broke restricted period trading rules in three initial public offerings to make money on short sales.
LightSquared is a company that seeks to develop a wholesale 4G LTE wireless broadband communications network integrated with satellite coverage across the United States using a block of frequencies located near the band used by the Global Positioning System (GPS). However, the issue of interference (using high-powered ground transmitters in spectrum intended for low-powered signals from satellites) has caused problems.