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SEC Issues Wells Notices to Harbinger Capital; Investors Seeking Representation

Following the recent notices sent by the Securities and Exchange Commission to Harbinger Capital, Philip Falcone, Omar Asali and Robin Roger, some investors of Harbinger Capital are seeking representation for possible securities arbitration claims. Philip Falcone, 49, is the manager of the New York-based hedge fund Harbinger Capital Partners LLC, which was valued three years ago at $26 billion but has now fallen to a value of only $5.7 billion. Furthermore, a wireless technology venture that is being backed by Falcone, LightSquared LP, is facing regulatory and political roadblocks.

SEC Issues Wells Notices to Harbinger Capital; Investors Seeking Representation

A statement by Harbinger said the Wells Notices issued by the SEC are related to alleged “violations of the federal securities laws’ anti-fraud provisions in connection with matters previously disclosed and an additional matter regarding the circumstances and disclosure related to agreements with certain fund investors.” The firm also stated that, should an enforcement action be brought by the SEC, they “intend to vigorously defend against it.”

The SEC and the U.S. Attorney’s Office are investigating Harbinger over a loan that was paid to Falcone from one of his funds. The loan amounted to over $113 million and was allegedly used to pay personal taxes. The kicker? The transaction was completed without notifying investors. In addition, the SEC is investigating whether preferential treatment was given to some investors over others. According to a statement made by Harbinger, withdrawals from its main hedge fund are anticipated to be suspended December 30, 2011.

In April, Harbinger announced to its clients that the government was looking into its conduct when trading an undisclosed firm’s debt securities from 2006 to 2008 to determine if it had engaged in market manipulation.

If you made investments with Harbinger Capital Partners LLC, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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