Wednesday, 2 December 2015
Last updated 5 hours ago
Oct 31 2012 | 11:36am ET
Already fighting nasty battles with creditors of its primary investment and with the Securities and Exchange Commission, Harbinger Capital Partners is taking some time to try to fend off a legal challenge from an investor.
The hedge fund last week asked a federal judge in New York to dismiss a proposed class-action lawsuit against it. That complaint, filed in February by a client who invested $4 million with Harbinger, accuses the hedge fund of misleading her and other clients about the size and risks of its investment in wireless Internet venture LightSquared.
Lili Schad said that Harbinger never indicated that it would invest more than 60% of its assets in LightSquared and never warned investors of the regulatory hurdles that have sent the company into bankruptcy. Schad's lawsuit also accused Harbinger of giving favorable redemption terms to some investors, including Goldman Sachs.
The allegation echoes one made against Harbinger and founder Philip Falcone in June by the SEC. The regulator also accuses Falcone of taking an improper loan from the hedge fund to pay his taxes and of market manipulation.
"Had plaintiff known that defendants would concentrate the fund's investments in LightSquared or known of the regulator obstacles the company faces, she would have refrained from investing in the fund or immediately sought to withdraw her investment from the fund," Schad's complaint said.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…