Law Firm Seeks Clients To Sue Harbinger

Dec 13 2011 | 1:00pm ET

Facing a Securities and Exchange Commission probe that could lead to civil fraud charges against it and founder Philip Falcone, Harbinger Capital Partners may have another legal headache, courtesy of plaintiffs' law firm Zamansky & Associates.

The New York firm yesterday announced its own investigation into Harbinger, asking current and former investors who "wish to discuss your rights, or have information to share that will assist our investigation" to contact it. Zamansky's press release does not specify what, exactly, it's own investigation is considering, but mentions the controversial $113 million loan Falcone took from the hedge funds two years ago, the SEC's market-manipulation probe and Harbinger's investment in wireless Internet venture LightSquared.

"Many investors have been reportedly angered over Harbinger's 'all in' approach to LightSquared and by closing its funds to redemptions," Zamansky, which would not doubt like to harness such anger towards litigation, wrote in its press release.

According to published reports, the SEC is investigating the loan, the possible market manipulation and potential preferential treatment given Goldman Sachs in terms of redemptions. Harbinger has denied any wrongdoing and said it will defend itself should the SEC bring a lawsuit.

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