Investing
Troubled Hedge Fund Harbinger Capital, It Founder Under Investigation, Loses 47%
Published:
Harbinger Capital’s main hedge fund lost 47% of its value last year. It was not the only bad news for founder Phil Falcone who is under investigation for violating securities laws.
Most of the loss was due to Falcone’s wild bet on broadband firm LightSquared which has been built to bring high speed internet to nearly a quarter of a billion Americans. The deployment and activiation of the technology has been blocked by the federal government because of interference with GDS signals. Some experts believe that LightSquared will eventually collapse without ever having an active customer.
“The decline was primarily due to a conservative adjustment in the fund’s holdings of LightSquared, to be consistent with the results of work done by the fund’s third- party valuation firm,” Lew Phelps, a spokesman for the New York-based fund, said in a statement. “The valuation takes into account uncertainty about the outcome of political issues related to alleged interference with the GPS system by LightSquared transmitters,” added Phelps, who confirmed the fund’s loss.
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