SEC warns LightSquared figure of potential fraud probe

◼ SEC warns LightSquared figure of potential fraud probe - Ed Morrissey/HotAir

It’s been a bad week for big Democratic donors. First Jon Corzine, one of Barack Obama’s main bundlers and his liaison to Wall Street, told Congress on Thursday that he had no idea that the firm he ran had somehow lost $1.2 billion in customer money attempting to cover losses from Corzine’s bets on European sovereign debt. Last night, another Wall Street figure in Democratic donor circles got news that the SEC may open a civil-fraud probe based on his operation of a hedge fund and the favorable treatment given to yet another Democrat-linked Wall Street firm...

This probe is separate from the issues surrounding LightSquared, however, but it involves more than just the $50 million Falcone apparently allowed Goldman Sachs to withdraw while preventing other investors from cashing out of Harbinger. They have already begun probing a loan Falcone took from the Harbinger fund, as well as “market manipulation,” but it’s apparently the Goldman Sachs withdrawal that has the SEC most exercised at the moment.

The news has one Senator asking for a more in-depth look at LightSquared’s connections to regulators...

◼ SEC Puts Falcone, Harbinger in Its Sights - Steve Eder/Wall St. Journal

Hedge-fund manager Philip Falcone was threatened with possible civil-fraud charges from the top U.S. securities regulator, the latest in a series of setbacks that have buffeted the investor since he rocketed to stardom in 2007.

Mr. Falcone and his firm, Harbinger Capital Partners LLC, received so-called Wells notices from the Securities and Exchange Commission, according to a regulatory filing Friday, an indication that charges are likely.

Among the issues the SEC has explored is whether Harbinger agreed to allow some investors, including Goldman Sachs Group Inc., to cash out of their holdings while barring other clients from withdrawing their money, ...