Philip Falcone

Philip Falcone grew up in Chisholm, Minnesota with nine siblings in a three-bedroom house. He attended Harvard University on financial aid and graduated with a Bachelor of Arts in Economics in 1984.

Growing up in Chisholm, Falcone was a stand-out hockey player. He went on to play Varsity hockey at Harvard. After graduating, Falcone played professionally for the Malmö Redhawks, a Swedish professional hockey team, until his playing career ended after one professional season when he sustained a leg injury.{{Cite news|url=http://www.businessinsider.co.id/hockey-players-on-wall-street-2014-6/20/#.VCi-i_ldXm6|title=25 of the Biggest Hockey Players Working on Wall Street|author=Julia La Roche|work=Business Insider|date=June 10, 2014|url-status=dead|archiveurl=https://web.archive.org/web/20140916012810/http://www.businessinsider.co.id/hockey-players-on-wall-street-2014-6/20/#.VCi-i_ldXm6|archivedate=September 16, 2014}}

In 1985, he started his career at Kidder, Peabody & Co.[http://topics.wsj.com/person/F/philip-a-falcone/499 The Wall Street Journal profile] He also worked at Wachovia. He was also Senior High Yield trader at First Union Capital Markets in Charlotte, North Carolina. From 1990 to 1995, he served as president and CEO of AAB Manufacturing Corporation". He was the head of High Yield trading at Gleacher Natwest from 1997 to 1998, and at Barclays Capital from 1998 to 2000.

In 2000, he founded Harbinger Capital with Raymond J. Harbert.John Helyar, [https://www.bloomberg.com/news/articles/2012-05-16/harbert-outperforming-falcone-with-11-return-suffers-asset-drop Harbert Outperforming Falcone With 11% Return Suffers Asset Drop], Bloomberg Business, May 16, 2012 In 2008, Falcone became a minority owner of the NHL's Minnesota Wild hockey team when he purchased a 40% stake of the hockey team. Through Harbinger Capital, Falcone and Harbert owned 20% of The New York Times in 2009.Laurie Bennett, [http://news.muckety.com/2009/06/02/raymond-harbert-phantom-investor-in-the-times-saga/16291 Raymond Harbert, phantom investor in the Times saga] {{Webarchive|url=https://web.archive.org/web/20150714113416/http://news.muckety.com/2009/06/02/raymond-harbert-phantom-investor-in-the-times-saga/16291 |date=July 14, 2015 }}, Muckety, June 2, 2009 That same year, Falcone became its majority owner, though Harbert remained an investor.

He is a founding council member of the Kissinger Institute on China and the United States.Philip Falcone Admits His Mistakes, Lisa Maria Falcone Wants an Etiquette Book to Prevent Her Own, in Vanity Fair, June 2, 2011 [http://www.vanityfair.com/online/daily/2011/06/philip-falcone-admits-his-mistakes-lisa-maria-falcone-wants-an-etiquette-book-to-prevent-her-own] He has made further donations to the American Museum of Natural History.

In February 2013, Forbes listed Falcone as one of the 40 Highest-Earning hedge fund managers.{{Citation |url= https://www.forbes.com/lists/2013/hedge-fund-managers-13_land.html |title=The 40 Highest-Earning Hedge Fund Managers & Traders 2013 |date=February 26, 2013 |magazine=Forbes |last=Vardi |first=Nathan }}

On November 25, 2014, it was announced that Falcone would step down as chief executive and chairman of Harbinger Group effective December 1 to focus on his other venture, HC2 Holdings.{{cite news|author =Matthew Goldstein|title=Philip Falcone, Hedge Fund Chief in Exile, Is Stepping Down|newspaper=The New York Times|date=November 25, 2014|url=https://dealbook.nytimes.com/2014/11/25/falcone-steps-down-from-top-roles-at-harbinger-group/|accessdate=November 26, 2014}}{{cite news|author=Nathan Vardi|title=Phil Falcone Resigns From Harbinger Group, Collects $40.3 Million|newspaper=Forbes|date=November 25, 2014|url=https://www.forbes.com/sites/nathanvardi/2014/11/25/phil-falcone-resigns-from-harbinger-group-collects-40-3-million/|accessdate=November 26, 2014}}{{cite news|author=Saijel Kishan, Zachary Tracer and Stephanie Ruhle|title=Falcone Steps Down From Harbinger Group to Focus on HC2|newspaper=Bloomberg Businessweek|date=November 25, 2014|url=http://www.businessweek.com/news/2014-11-25/philip-falcone-steps-down-as-chairman-ceo-of-harbinger-group|archive-url=https://web.archive.org/web/20141125211334/http://www.businessweek.com/news/2014-11-25/philip-falcone-steps-down-as-chairman-ceo-of-harbinger-group|url-status=dead|archive-date=November 25, 2014|accessdate=November 26, 2014}}

A significant focus on Phil Falcone's investment activities has been the telecommunications company Lightsquared, which attempted to build a multibillion-dollar satellite-based network that would have supplied 4G wireless broadband in competition with AT&T and Verizon Wireless. The plan, however, consisted of gaining wireless spectrum reserved for satellite uses and employing it for terrestrial communication. Critics described this use of wireless spectrum as a loophole meant to avoid paying royalties to the government.John Hempton, [http://brontecapital.blogspot.com/2012/02/lightsquared-some-comments.html "Lightsquared – some comments,"] February 2, 2012{{Better source needed|date=October 2019}} Lightsquared changed its name to Ligado Networks, and as of 2024, continues to operate under that name.{{cite news |last1=Ensign |first1=Rachel Louise |title=How to Lose $2 Billion in 10 Years: Unpaid Bills Pile Up for Former Hedge-Fund Star |url=https://www.wsj.com/articles/how-to-lose-2-billion-in-10-years-unpaid-bills-pile-up-for-former-hedge-fund-star-11639051201 |access-date=21 October 2024 |publisher=Dow Jones & Company, Inc. |date=December 9, 2022 |quote=Harbinger’s remaining holdings recently included a stake in the postbankruptcy LightSquared, known as Ligado Networks.}}

Republican legislators like Chuck Grassley, Ralph Hall and Darrell Issa expressed concerns that Falcone would receive special treatment to develop LightSquared over the United States Military's Global Positioning System.Todd Shields, 'Republicans Want Records of Philip Falcone White House Contacts', in Bloomberg Businessweek, September 21, 2011 [https://www.bloomberg.com/news/2011-09-20/house-republicans-ask-white-house-for-records-of-falcone-contact.html] Falcone later denied the claim.'LightSquared Founder Philip Falcone Says He's Never Met President Obama, Denies That Network Interferes With Military GPS, Airline Safety', on Fox News, September 19, 2011 {{cite web |url=http://foxnewsinsider.com/2011/09/19/lightsquared-founder-philip-falcone-says-he%E2%80%99s-never-met-president-obama-denies-that-network-interferes-with-military-gps-airline-safety/ |title=LightSquared Founder Philip Falcone Says He's Never Met President Obama, Denies That Network Interferes with Military GPS, Airline Safety | Fox News Insider |accessdate=27 November 2011 |url-status=dead |archiveurl=https://archive.today/20120708112039/http://foxnewsinsider.com/2011/09/19/lightsquared-founder-philip-falcone-says-he%E2%80%99s-never-met-president-obama-denies-that-network-interferes-with-military-gps-airline-safety/ |archivedate=July 8, 2012 }} On February 15, 2012, the Federal Communications Commission revoked the 2011 conditional approval for further development of the LightSquared network, stating it would interfere with GPS signals.{{cite news| url=https://www.nytimes.com/2012/02/15/business/media/fcc-bars-airwave-use-for-broadband-plan.html | work=The New York Times | first=Edward | last=Wyatt | title=F.C.C. Bars the Use of Airwaves for a Broadband Plan | date=February 14, 2012}}

{{see also|Short squeeze}}

On June 27, 2012, the U.S. Securities and Exchange Commission filed securities fraud charges against Falcone and Harbinger Capital Partners, alleging that Falcone "used fund assets [of $113.2 million] to pay his taxes, conducted an illegal 'short squeeze' to manipulate bond prices, secretly favored certain customers at the expense of others, and that Harbinger unlawfully bought equity securities in a public offering, after having sold short the same security during a restricted period."{{cite web|title= Philip A. Falcone and Harbinger Charged with Securities Fraud|publisher=Securities and Exchange Commission|url=https://www.sec.gov/news/press/2012/2012-122.htm|date=June 27, 2012|accessdate=June 27, 2012}}

The short squeeze was performed by Falcone in relation to a series of high-yield bonds issued by MAAX Holdings. After hearing that a firm was shorting the bonds, Falcone purchased the entire issue of bonds. He also lent the bonds to the short-sellers, and then bought them back when the traders sold them. As a result, his total exposure exceeded the entire issue of the MAAX bonds. Falcone then stopped lending the bonds, so that short-sellers could not liquidate their positions anymore. The price of the bonds rose dramatically.{{cite news |last1=Henning |first1=Peter J. |title=In Case Against Philip Falcone, a Warning to Others |url=https://dealbook.nytimes.com/2012/06/28/in-case-against-philip-falcone-a-warning-to-others/ |access-date=29 January 2021 |work=New York Times |date=28 June 2012}}{{cite news |last1=Levine |first1=Matt |title=GameStop Is Just a Game |url=https://www.bloomberg.com/opinion/articles/2021-01-26/will-wallstreetbets-face-sec-scrutiny-after-gamestop-rally |access-date=29 January 2021 |work=Bloomberg Opinion |date=26 January 2021}} The short-sellers could only liquidate their positions by contacting Falcone directly.

In May 2013, he accepted an SEC settlement in which he and Harbinger agreed to pay a total of $18 million. Under the deal, Falcone would have been banned from operating as an investment advisor for two years.[https://www.cnbc.com/2013/05/09/philip-falcone-settles-with-sec-agrees-to-twoyear-ban.html Hedge Fund Manager Philip Falcone Banned as Investment Advisor For Two Years in SEC Deal] However, in a rare move, the commissioners overruled the enforcement staff and threw out the deal, forcing the two sides back to the bargaining table. Reportedly, SEC chairwoman Mary Jo White felt the deal was too lenient. Finally, on August 19, the SEC and Falcone agreed to a deal in which he and Harbinger admitted breaking the securities laws. It was the first SEC settlement in years in which the defendant was required to admit wrongdoing; usually, defendants who accept SEC settlements do not admit or deny illegal activity.{{cite news|url=https://dealbook.nytimes.com/2013/08/19/hedge-fund-manager-to-admit-to-wrongdoing-in-revised-deal-with-s-e-c|title=Falcone to Admit to Wrongdoing as S.E.C. Takes a Harder Line|last=Stevenson|first=Alexandra|work=The New York Times|date=August 20, 2013}}

Under the terms of the deal, Falcone paid a total of $11.5 million of his own money to settle the charges. He disgorged a total of $6.5 million in illicit profits and pay $1.01 million in prejudgment interest and $4 million in civil penalties, and also accepted a five-year ban from the securities industry. By comparison, the May deal required him to pay only $4 million out of his own pocket. Harbinger paid $6.5 million in civil penalties. Falcone admitted to siphoning off $113.2 million of Harbinger assets to pay his personal state and federal taxes and pay customer redemptions to favored clients. He also admitted to manipulating the bond price of MAAX Holdings, a Canadian bathroom products manufacturer, by buying up all of the outstanding bonds and demanding that Goldman Sachs settle all outstanding MAAX transactions and deliver the bonds it owed. Falcone was well aware Goldman couldn't deliver the bonds because all of them were tied up by Harbinger.[https://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539780222 SEC press release announcing Falcone settlement][https://www.sec.gov/litigation/litreleases/2013/consent-pr2013-159.pdf Consent decree in 2013 SEC case][https://www.sec.gov/litigation/litreleases/2013/proposedjudgment-pr2013-159.pdf Proposed judgment in 2013 SEC case]

On July 4, 2014, the SEC Office of the Whistleblower rejected a claim made by an individual requesting a reward for assisting in the investigation. The SEC rejected the claim, asserting in the "Claimant did not provide information that led to the successful enforcement".https://www.sec.gov/about/offices/owb/orders/owb-2012-81-final-070414.pdf {{Bare URL PDF|date=March 2022}}

Falcone is married with two children, and lives in New York City. In 1997, Falcone married Lisa Velasquez .{{Cite news| url =https://www.bloomberg.com/news/2010-09-16/lisa-falcone-who-you-calling-wife-of-.html|title=Lisa Falcone: Who You Calling Wife of...? |publisher=Bloomberg News |date = September 16, 2010}} Lisa was born in 1961 and grew up in Spanish Harlem and has an associate's degree from Pace University. In 1985, she went to Milan Italy to model. In 2008, she started a film production company, Everest Entertainment, and she has produced Mother and Child, 127 Hours, and Win Win. She is active in philanthropic causes, including the American Museum of Natural History and sits on the board of the New York City Ballet. In 2009, the couple reportedly donated $10 million to New York City's High Line project.Robin Pogrebin, [https://www.nytimes.com/2009/06/30/arts/30falcone.html Philanthropist With a Sense of Timing Raises Her Profile], The New York Times, June 29, 2009. Retrieved June 27, 2012 They have twin daughters, Liliana and Carolina (born February 2005).{{Cite news| url =http://nymag.com/nymetro/shopping/fashion/columns/look/15109/|title= Lisa Falcone, writer, with Liliana and Carolina|author= Amy Larocca |work=New York |date = November 28, 2005}}{{Cite news| url = http://nymag.com/daily/intelligencer/2010/12/10_under_10_slideshow.html |title= 10 Under 10: The Power Children of New York|author= Jessica Pressler and Alice Gregory|work=New York |date = December 21, 2010}}{{Cite news| url =http://www.vanityfair.com/news/2011/07/falcones-201107|title=Falcone Quest|author=Bethany McLean|author-link=Bethany McLean|work=Vanity Fair |date = July 2011}}

In 1999, Falcone built a house in Sag Harbor, New York, which he sold in 2005 for $1.57 million.[https://www.wsj.com/articles/SB10001424053111904900904576555000887279000 The Wall Street Journal, House of the Day]{{Cite news | url=https://online.wsj.com/news/articles/SB10001424053111904537404576554490981172256 |title = Soaring Ceilings in Sag Harbor Villa|newspaper = Wall Street Journal|date = September 7, 2011|last1 = Pope-Chappell|first1 = Maya}}

In 2008, Falcone bought a house on the Upper East Side, formerly owned by Jeremiah Milbank and later Bob Guccione, for $49 million. Also in 2008, Falcone bought a Saint Barthélemy villa for $39 million,{{Cite news| url = http://www.businessinsider.com/phil-falcone-st-barts-estate-2012-7?op=1|title=Check Out Phil Falcone's Breathtaking St. Barts Estate Mentioned in the SEC Complaint Against Him|author=Julia La Roche|work=Business Insider |date =July 2, 2012}}{{Cite news| url =http://www.businessweek.com/articles/2013-03-25/michael-jacksons-lender-helps-hedge-funder-phil-falcone | archive-url =https://web.archive.org/web/20130327064505/http://www.businessweek.com/articles/2013-03-25/michael-jacksons-lender-helps-hedge-funder-phil-falcone | url-status =dead | archive-date =March 27, 2013 |title= Michael Jackson's Lender Helps Hedge Funder Falcone|author= Nick Summers|publisher=Bloomberg Businessweek |date = March 25, 2013}} which he sold in 2019.

Falcone's former chef, Brian Villanueva, sued Falcone over an allegedly hostile work environment and alleged racist remarks and they had settled out of court for $60,000. In 2020, Villaneuva filed a new lawsuit claiming to not have been paid the settlement, while Falcone claimed to not have the funds.{{Cite news| url=https://business.financialpost.com/pmn/business-pmn/philip-falcone-claims-he-cant-pay-60000-settlement-former-chef-says |title= Philip Falcone Claims He Can't Pay $60,000 Settlement, Former Chef Says|author= Chris Dolmetsch|publisher=Financial Post |date = June 3, 2020}}

{{Reflist}}

• {{Official website |http://www.hc2.com}}

{{Authority control}}

{{DEFAULTSORT:Falcone, Philip}}

Category:Living people

Category:People from Chisholm, Minnesota

Category:People from Sag Harbor, New York

Category:Businesspeople from Manhattan

Category:People from the Upper East Side

Category:Harvard College alumni

Category:American billionaires

Category:Minnesota Wild executives

Category:National Hockey League owners

Category:The New York Times people

Category:Harvard Crimson men's ice hockey players

Category:Businesspeople from Minnesota

Category:Year of birth missing (living people)