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Falcone's Harbinger Capital May Face Fraud Charges

Philip Falcone
Philip Falcone

Hedge fund Harbinger Capitalcould face civil action for possible fraud and other securities-law violations, the Securities and Exchange said.

The firm, including founder Philip Falcone, received so-called Wellls Notices from the SEC on Dec. 8, informing them of the possible charges and giving them an opportunity to refute the allegations.

The SEC did not explain what the possible violations are, except to say they are against "securities laws anti-fraud provisions."

Harbinger's stock fell in reaction to the report.

The firm was investigated by the SEC earlier this year on possible violation of short-selling rules in 2008, but regulators did not find evidence of any wrongdoing.

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