Philip Falcone

Philip A. Falcone
Born	Chisholm, Minnesota, U.S.
Occupation(s)	Entrepreneur, hedge fund manager
Years active	1985–present
Known for	Founder of Harbinger Capital and LightSquared

Philip A. Falcone is an American entrepreneur known for founding both Harbinger Capital and LightSquared.

Early life and education

Raised in Chisholm, Minnesota, Philip Falcone grew up alongside nine siblings in a modest three-bedroom home. He attended Harvard University on a financial aid scholarship, where he completed a Bachelor of Arts degree in Economics in 1984.

Falcone distinguished himself as a hockey player during his youth in Chisholm and continued to play at the varsity level while at Harvard. After graduation, he pursued a professional hockey career with the Malmö Redhawks in Sweden, which was cut short by a leg injury after one season.

Career

Falcone launched his professional journey in 1985 at Kidder, Peabody & Co. and later gained experience working at Wachovia. He held the role of Senior High Yield trader at First Union Capital Markets based in Charlotte, North Carolina, followed by serving as president and CEO of AAB Manufacturing Corporation from 1990 through 1995. Subsequently, he led High Yield trading departments at Gleacher Natwest (1997–1998) and Barclays Capital (1998–2000).

In 2000, Falcone teamed up with Raymond J. Harbert to establish Harbinger Capital. By 2008, he had acquired a 40% ownership interest in the NHL franchise Minnesota Wild. Through their partnership at Harbinger Capital, Falcone and Harbert held a 20% share of The New York Times as of 2009. That same year, Falcone became the principal owner while Harbert maintained his position as an investor.

Falcone is also a founding council member of the Kissinger Institute on China and the United States and has made contributions to the American Museum of Natural History.

In February 2013, Forbes ranked him among the 40 top-earning hedge fund managers.

On November 25, 2014, Falcone declared his intention to resign as chairman and chief executive officer of Harbinger Group effective December 1, shifting his focus to HC2 Holdings.

Lightsquared

Among Phil Falcone's investment ventures was Lightsquared, a telecom firm focused on establishing a satellite-driven 4G wireless broadband network valued in the multibillion-dollar range, aimed at competing with major carriers like AT&T and Verizon Wireless. The company’s plan centered on converting spectrum initially allocated for satellite services into terrestrial wireless communication, a tactic criticized for exploiting regulatory gaps to bypass government royalty fees. As of 2024, Lightsquared operates under the name Ligado Networks.

Concerns were voiced by Republican lawmakers including Chuck Grassley, Ralph Hall, and Darrell Issa regarding alleged preferential treatment granted to Falcone during Lightsquared’s development, particularly in relation to interference with the U.S. Military’s Global Positioning System (GPS). Falcone refuted these accusations. On February 15, 2012, the Federal Communications Commission withdrew its conditional approval granted in 2011 for Lightsquared’s network build-out due to concerns over GPS signal disruption.

2012 securities fraud charge

On June 27, 2012, the U.S. Securities and Exchange Commission filed charges against Falcone and Harbinger Capital Partners alleging securities fraud. The SEC accused Falcone of misappropriating $113.2 million of fund assets to pay personal taxes, orchestrating an illicit short squeeze to manipulate bond prices, prioritizing certain investors unfairly, and Harbinger illegally purchasing equity securities during a blackout period.

The short squeeze targeted high-yield bonds issued by MAAX Holdings. After detecting short-selling activity, Falcone acquired the entire bond issuance, lent bonds to short sellers, then repurchased them once sold. His holdings surpassed the total MAAX bonds outstanding. Subsequently, he ceased lending bonds, trapping short sellers who could only exit their positions by negotiating directly with Falcone, causing bond prices to spike.

In May 2013, Falcone consented to an $18 million settlement with the SEC that included a two-year ban from acting as an investment advisor. However, SEC commissioners deemed this agreement insufficiently punitive and rejected it. A revised settlement was reached on August 19, 2013, requiring Falcone and Harbinger to acknowledge misconduct—an uncommon requirement in SEC settlements.

Under this updated agreement, Falcone personally paid $11.5 million comprising disgorgement of $6.5 million in ill-gotten gains, $1.01 million in prejudgment interest, and $4 million in civil penalties, alongside a five-year prohibition from the securities industry. Harbinger paid $6.5 million in fines. Falcone admitted to diverting $113.2 million of fund assets for personal tax obligations and favoring some client redemptions while manipulating MAAX bond prices by controlling all outstanding bonds and compelling Goldman Sachs to settle trades it could not execute.

On July 4, 2014, the SEC Office of the Whistleblower declined a reward claim associated with the investigation, stating that the claimant did not provide information that directly led to enforcement success.

Personal life

Falcone is married with two children and lives in New York City. In 1997, he wed Lisa Velasquez, who was raised in Spanish Harlem and holds an associate degree from Pace University. Lisa worked as a model in Milan during 1985 and later founded Everest Entertainment in 2008—a film production company responsible for titles such as Mother and Child, 127 Hours, and Win Win. She is actively involved in charitable work, supporting institutions like the American Museum of Natural History and serving on the board of the New York City Ballet. The couple donated $10 million in 2009 toward New York City’s High Line project. They have twin daughters named Liliana and Carolina, born in 2005.

In 1999, Falcone constructed a residence in Sag Harbor, New York, which he sold six years later for $1.57 million. He acquired an Upper East Side home in 2008 for $49 million as well as a villa on Saint Barthélemy for $39 million; he sold the latter property in 2019.

Falcone was involved in litigation with his former chef Brian Villanueva over allegations of a hostile work environment and racist comments; this dispute was settled for $60,000. In 2020, Villanueva initiated a new lawsuit claiming nonpayment of the settlement amount—a claim Falcone contested citing insufficient funds.