Philip A. Falcone is an
American
American(s) may refer to:
* American, something of, from, or related to the United States of America, commonly known as the "United States" or "America"
** Americans, citizens and nationals of the United States of America
** American ancestry, pe ...
businessman and the founder of
Harbinger Capital and
LightSquared
Ligado Networks, formerly known as LightSquared, is an American satellite communications company.
After restructuring, emerging from bankruptcy and modifying its network plan, the new company, Ligado Networks, launched in 2016. It operates the Sk ...
.
[Forbes]
Profile of Philip Falcone
as of March 2013. Retrieved September 5, 2013[NNDB profile](_blank)
/ref>[Bethany McLean, 'Falcone Quest', in ''Vanity Fair'', July 2011](_blank)
/ref>
Early life and education
Philip Falcone grew up in Chisholm, Minnesota
Chisholm is a city in St. Louis County, Minnesota, United States. The population was 4,976 at the 2010 census. The city has been called "The Heart of the Iron Range" due to its location in the middle of the Mesabi Iron Range. History
The city ...
with nine siblings in a three-bedroom house. He attended Harvard University
Harvard University is a private Ivy League research university in Cambridge, Massachusetts. Founded in 1636 as Harvard College and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of high ...
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
The IF Malmö Redhawks (colloquially referred to simply as Malmö or by past abbreviation MIF) is a Swedish professional ice hockey team based in Malmö which plays in the SHL, with Malmö Arena as the venue for home games.
The history of the ...
, a Swedish professional hockey team, until his playing career ended after one professional season when he sustained a leg injury.
Career
In 1985, he started his career at Kidder, Peabody & Co.[The Wall Street Journal profile](_blank)
/ref> He also worked at Wachovia
Wachovia was a diversified financial services company based in Charlotte, North Carolina. Before its acquisition by Wells Fargo and Company in 2008, Wachovia was the fourth-largest bank holding company in the United States, based on total asset ...
. He was also Senior High Yield trader at First Union Capital Markets in Charlotte, North Carolina
Charlotte ( ) is the most populous city in the U.S. state of North Carolina. Located in the Piedmont region, it is the county seat of Mecklenburg County. The population was 874,579 at the 2020 census, making Charlotte the 16th-most populo ...
. 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
Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services.
Barclays traces ...
from 1998 to 2000.
In 2000, he founded Harbinger Capital with Raymond J. Harbert.[John Helyar]
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
The Minnesota Wild are a professional ice hockey team based in Saint Paul, Minnesota. The Wild competes in the National Hockey League (NHL) as a member of the Central Division in the Western Conference and play their home games at the Xcel Ener ...
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
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid d ...
'' in 2009.[Laurie Bennett]
Raymond Harbert, phantom investor in the Times saga
, '' 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
The Kissinger Institute on China and the United States is a non-profit research organization dedicated to promoting greater understanding of issues in the Sino-American relations, relationship between the People's Republic of China and the United S ...
.[Philip Falcone Admits His Mistakes, Lisa Maria Falcone Wants an Etiquette Book to Prevent Her Own, in '' Vanity Fair'', June 2, 201]
/ref> 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.
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.
Lightsquared
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.
Republican
Republican can refer to:
Political ideology
* An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law.
** Republicanism, the ideology in support of republics or agains ...
legislators like Chuck Grassley
Charles Ernest Grassley (born September 17, 1933) is an American politician serving as the president pro tempore emeritus of the United States Senate, and the senior United States senator from Iowa, having held the seat since 1981. In 2022, h ...
, Ralph Hall
Ralph Moody Hall (May 3, 1923 – March 7, 2019) was an American politician who served as the United States representative for from 1981 to 2015. He was first elected in 1980, and was the chairman of the House Committee on Science, Space and Tec ...
and Darrell Issa
Darrell Edward Issa ( ; born November 1, 1953) is an American businessman and politician who has served as the U.S. representative for California's 50th congressional district since 2021. A member of the Republican Party, he previously served ...
have expressed concerns that he would receive special treatment to develop LightSquared over the United States Military
The United States Armed Forces are the military forces of the United States. The armed forces consists of six service branches: the Army, Marine Corps, Navy, Air Force, Space Force, and Coast Guard. The president of the United States is th ...
's Global Positioning System
The Global Positioning System (GPS), originally Navstar GPS, is a satellite-based radionavigation system owned by the United States government and operated by the United States Space Force. It is one of the global navigation satellite sy ...
. He later denied the claim. On February 15, 2012, the Federal Communications Commission
The Federal Communications Commission (FCC) is an independent agency of the United States federal government that regulates communications by radio, television, wire, satellite, and cable across the United States. The FCC maintains jurisdicti ...
revoked the 2011 conditional approval for further development of the LightSquared
Ligado Networks, formerly known as LightSquared, is an American satellite communications company.
After restructuring, emerging from bankruptcy and modifying its network plan, the new company, Ligado Networks, launched in 2016. It operates the Sk ...
network, stating it would interfere with GPS
The Global Positioning System (GPS), originally Navstar GPS, is a satellite-based radionavigation system owned by the United States government and operated by the United States Space Force. It is one of the global navigation satellite sy ...
signals.
2012 securities fraud charge
On June 27, 2012, the U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
filed securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in lo ...
charges against Falcone and Harbinger Capital Partners, alleging that Falcone "used fund assets f $113.2 millionto pay his taxes, conducted an illegal 'short squeeze
In the stock market, a short squeeze is a rapid increase in the price of a stock owing primarily to an excess of short selling of a stock rather than underlying fundamentals. A short squeeze occurs when there is a lack of supply and an excess of ...
' 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."
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. 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. 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
Mary Jo White (born December 27, 1947) is an American attorney who served as the 31st chair of the Securities and Exchange Commission (SEC) from 2013 to 2017. She was the first woman to be the United States Attorney for the Southern District o ...
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 law. 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 breaking the securities laws.
Under the terms of the deal, Falcone will have to pay a total of $11.5 million of his own money to settle the charges. He will disgorge 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 will pay $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.[
On July 4, 2014, the ]SEC Office of the Whistleblower
The U.S. Securities and Exchange Commission (SEC) whistleblower program went into effect on July 21, 2010, when the President signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. The same law also established a whistl ...
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".
Personal life
Falcone is married with two children, and lives in New York City. In 1997, Falcone married Lisa Velasquez . Lisa was born in 1961 and grew up in Spanish Harlem
East Harlem, also known as Spanish Harlem or and historically known as Italian Harlem, is a neighborhood of Upper Manhattan, New York City, roughly encompassing the area north of the Upper East Side and bounded by 96th Street to the south, F ...
and has an associate's degree
An associate degree is an undergraduate degree awarded after a course of Tertiary education, post-secondary study lasting two to three years. It is a level of qualification above a high school diploma, GED, or matriculation, and below a bachelo ...
from Pace University
Pace University is a private university with its main campus in New York City and secondary campuses in Westchester County, New York. It was established in 1906 by the brothers Homer St. Clair Pace and Charles A. Pace as a business school. Pace ...
. 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
''127 Hours'' is a 2010 biographical psychological survival drama film co-written, produced and directed by Danny Boyle. The film stars James Franco, Kate Mara, Amber Tamblyn and Clémence Poésy. In the film, canyoneer Aron Ralston mus ...
'', 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
New York City Ballet (NYCB) is a ballet company founded in 1948 by choreographer George Balanchine and Lincoln Kirstein. Balanchine and Jerome Robbins are considered the founding choreographers of the company. Léon Barzin was the company' ...
. In 2009, the couple reportedly donated $10 million to New York City's High Line
The High Line is a elevated linear park, greenway and rail trail created on a former New York Central Railroad spur on the west side of Manhattan in New York City. The High Line's design is a collaboration between James Corner Field Opera ...
project. They have twin daughters, Liliana and Carolina (born February 2005).
In 1999, Falcone built a house in Sag Harbor, New York
Sag Harbor is an incorporated village in Suffolk County, New York, United States, in the towns of Southampton and East Hampton on eastern Long Island. The village developed as a working port on Gardiner's Bay. The population was 2,772 at the 2 ...
, which he sold in 2005 for $1.57 million.
In 2008, Falcone bought a house on the Upper East Side
The Upper East Side, sometimes abbreviated UES, is a neighborhood in the borough of Manhattan in New York City, bounded by 96th Street to the north, the East River to the east, 59th Street to the south, and Central Park/Fifth Avenue to the wes ...
, formerly owned by Jeremiah Milbank
Jeremiah Milbank (April 18, 1818 – June 1, 1884) American businessman, was a successful dry goods commission merchant, speculator in Texas territorial bonds, manufacturer, and railroad investor. His most successful business efforts were the New Y ...
and later Bob Guccione
Robert Charles Joseph Edward Sabatini Guccione ( ; December 17, 1930 – October 20, 2010) was an American photographer and publisher. He founded the adult magazine '' Penthouse'' in 1965. This was aimed at competing with Hugh Hefner's ''Playboy' ...
, for $49 million. Also in 2008, Falcone bought a Saint Barthélemy
Saint Barthélemy (french: Saint-Barthélemy, ), officially the Collectivité territoriale de Saint-Barthélemy, is an overseas collectivity of France in the Caribbean. It is often abbreviated to St. Barth in French, and St. Barts in English ...
villa for $39 million.
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.
References
External links
*
{{DEFAULTSORT:Falcone, Philip
Living people
People from Chisholm, Minnesota
People from Sag Harbor, New York
People from the Upper East Side
Harvard College alumni
Businesspeople from New York City
American billionaires
Minnesota Wild executives
National Hockey League owners
The New York Times people
Harvard Crimson men's ice hockey players
Businesspeople from Minnesota
Year of birth missing (living people)