BOSTON - The bad news keeps coming for Philip Falcone, once one of the hedge fund industry's biggest stars.
The U.S. Securities and Exchange Commission filed a lawsuit in federal court on Wednesday charging the 49-year-old billionaire with market manipulation, giving preferential treatment to several big clients, and borrowing cash from his hedge fund Harbinger Capital Partners to pay personal expenses.
"Today's charges read like the final exam in a graduate school course in how to operate a hedge fund unlawfully," Robert Khuzami, director of the SEC's division of enforcement, said in a statement.
The lawsuit comes just one month after LightSquared, a wireless telecommunications upstart backed by Falcone, which over time became his fund's biggest investment, filed for bankruptcy.
The one-two punch of the LightSquared bankruptcy and the SEC civil charges raise questions about Falcone's future in the $2 trillion hedge fund industry.
Once known as a
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