WASHINGTON — The Securities and Exchange Commission has rejected an $18 million settlement that would have banned billionaire hedge fund manager Philip Falcone from the securities industry for two years.
Falcone and Harbinger Capital Partners were told Thursday that SEC commissioners voted down the settlement, according to a filing Friday by parent company Harbinger Group Inc. The SEC’s enforcement staff had proposed the deal in May.
The deal sought to settle civil fraud charges by fining Falcone and hedge fund firm Harbinger Capital $18 million. The SEC has accused Falcone and the firm of using fund money to pay his taxes and favoring some clients over others.
The filing didn’t say why the deal was rejected. SEC votes on enforcement actions occur in closed sessions.
Spokesmen for the SEC and Falcone didn’t immediately respond to requests for comment.