Feds To Look Into Falcone Wireless Venture

Jan 14 2011 | 1:22pm ET

For Philip Falcone, the new year is starting off pretty much the same way the old one went out: badly.

Four U.S. Cabinet agencies want the Federal Communications Commission to take a long, hard look at the Harbinger Capital Management founder's plan to build a nationwide wireless network. Until the "significant interference concerns" are resolved, the venture, LightSquared, will not be approved, the FCC said.

"It is incumbent on the FCC to deal with the resulting interference issues before any interference occurs," the Commerce Department's Lawrence Strickling wrote to the agency. Julius Knapp, who heads the FCC's office of engineering and technology, said the agency would "ensure that any approvals would not result in harmful interference to current licensed users."

In addition to Commerce, the departments of Defense, Transportation and Homeland Security want the LightSquared proposal reviewed.

Falcone has poured some 40% of Harbinger's assets into the ambitious plan, which is set to begin trials in four cities this year. The investment has caused a good deal of concern for investors and may have contributed to redemptions at the firm, which manages just $7 billion today, down from more than $20 billion in 2008. It also hasn't helped the firm's performance; Harbinger's main funds were down about 12% last year.

The increased scrutiny for LightSquared comes after a difficult year for Harbinger. The firm found itself under fire from both investors and the Securities and Exchange Commission for a $113 million loan Falcone took from Harbinger hedge funds to pay a tax bill. And Falcone's move to create a permanent capital vehicle produced a lawsuit seeking to overturn the deal.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.