Philip Falcone's Harbinger Group share values rallied at the New York Stock Exchange after shares were sold to a consortium of investors led by Leucadia National Corp. Share values increased by USD0.31 or 3% to USD10.68 at late day trading. The rise comes after the announcement that the firm had sold 18.6 million shares at USD8.50 per shate to Leucadia. The sale gives Leucadia a 13% share in the buyout firm.
Last August, Falcone had agreed to return money to clients after he had reached a settlement agreement with the US Securities and Exchange Commission. One of his clients, Manal Mehta's Sunesis Capital LLC is one these clients. The share prices were affected by how much the funding of Falcone would be able to cover the clients' full invested amount. Through an email, Mehta said, "The fact that stake is being sold down in an orderly manner and going to very smart people like Leucadia is a significant positive."
As for other investors, who were unidentified in the regulatory filing made by Harbinger, purchased another 5.1 million shares.
The settlement agreement between Falcone and the SEC involves a five year ban from participating in the securities industry as well as an admission of wrongdoing for improper use of funds for personal expenses as well as providing preferential treatment to clients in the return of their invested funds.
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