Hedge-fund manager Philip Falcone admitted wrongdoing as part of a civil settlement with securities regulators, a landmark in the government's new drive to push defendants to acknowledge their bad behavior, The Wall Street Journal reported yesterday. As part of the settlement, disclosed Monday, Falcone and his hedge-fund firm, Harbinger Capital Partners, will pay more than $18 million and Falcone will be banned from the securities industry for at least five years. Monday's civil settlement marks the first time that an individual or firm has made such an admission in a deal with the Securities and Exchange Commission (SEC), except in cases where they had previously pleaded guilty in a criminal proceeding or been criminally convicted. The settlement was the resolution of two civil lawsuits filed by the SEC against Falcone and Harbinger last year. The suits alleged, in part, that they had duped investors about a $113 million personal loan that Falcone took out from a Harbinger fund to pay his own taxes, even as other investors in the fund were prevented from pulling their money.
