Targets of Securities and Exchange Commission civil suits may face yet another hurdle toward settlement, as demonstrated by the commissioners' rejection this month of a settlement in principle reached between SEC enforcement staff, Philip A. Falcone, and his hedge fund, Harbinger Capital Partners LLC. The commissioners' rejection of the Harbinger settlement, coupled with its recent shift in policy regarding "neither admit nor deny" statements and the federal courts' heightened scrutiny over SEC settlements, suggests that litigants may have a tougher road to settlement than they have in the past.
The Harbinger Case
The SEC filed two related civil actions on June 27, 2012, against certain Harbinger entities, Falcone, and Peter A. Jenson (Harbinger's former chief operating officer). The SEC alleged that Falcone and Harbinger violated Section 17(a) of the Securities Act, Section 10(b) and Rule 10b-5 of the Exchange Act, and Sections 206(1), 206(2), and 206(4) and Rule 206(4)-8 of the Advisers Act. The SEC further alleged that Falcone was liable as a "control person" under Section 20(a) of the Exchange Act. Finally, the SEC alleged that Jenson aided and abetted Falcone's and Harbinger Capital's misappropriation scheme.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
