In 1985, he started his career at
Kidder, Peabody & Co. He also worked at
Wachovia. In 2008, Falcone became a minority owner of the NHL's
Minnesota Wild hockey team when he purchased a 40% stake of the hockey team. That same year, Falcone became its majority owner, though Harbert remained an investor. He has made further donations to the
American Museum of Natural History. On November 25, 2014, it was announced that Falcone would step down as chief executive and chairman of Harbinger Group effective December 1 to focus on his other venture, HC2 Holdings.
Lightsquared A significant focus on Phil Falcone's investment activities has been the telecommunications company Lightsquared, which attempted to build a multibillion-dollar satellite-based network that would have supplied 4G wireless broadband in competition with AT&T and Verizon Wireless. Lightsquared changed its name to Ligado Networks, and as of 2024, continues to operate under that name.
Republican legislators like
Chuck Grassley,
Ralph Hall and
Darrell Issa expressed concerns that Falcone would receive special treatment to develop LightSquared over the
United States Military's
Global Positioning System. Falcone later denied the claim. On February 15, 2012, the
Federal Communications Commission revoked the 2011 conditional approval for further development of the
LightSquared network, stating it would interfere with
GPS signals.
2012 securities fraud charge On June 27, 2012, the
U.S. Securities and Exchange Commission filed
securities fraud charges against Falcone and
Harbinger Capital Partners, alleging that Falcone "used fund assets [of $113.2 million] to pay his taxes, conducted an illegal '
short squeeze' to manipulate bond prices, secretly favored certain customers at the expense of others, and that Harbinger unlawfully bought equity securities in a public offering, after having sold short the same security during a restricted period." The short squeeze was performed by Falcone in relation to a series of high-yield bonds issued by MAAX Holdings. After hearing that a firm was shorting the bonds, Falcone purchased the entire issue of bonds. He also lent the bonds to the short-sellers, and then bought them back when the traders sold them. As a result, his total exposure exceeded the entire issue of the MAAX bonds. Falcone then stopped lending the bonds, so that short-sellers could not liquidate their positions anymore. The price of the bonds rose dramatically. The short-sellers could only liquidate their positions by contacting Falcone directly. However, in a rare move, the commissioners overruled the enforcement staff and threw out the deal, forcing the two sides back to the bargaining table. Reportedly, SEC chairwoman
Mary Jo White felt the deal was too lenient. Finally, on August 19, the SEC and Falcone agreed to a deal in which he and Harbinger admitted breaking the securities laws. It was the first SEC settlement in years in which the defendant was required to admit wrongdoing; usually, defendants who accept SEC settlements do not admit or deny illegal activity. Under the terms of the deal, Falcone paid a total of $11.5 million of his own money to settle the charges. He
disgorged a total of $6.5 million in illicit profits and pay $1.01 million in prejudgment interest and $4 million in civil penalties, and also accepted a five-year ban from the securities industry. By comparison, the May deal required him to pay only $4 million out of his own pocket. Harbinger paid $6.5 million in civil penalties. Falcone admitted to siphoning off $113.2 million of Harbinger assets to pay his personal state and federal taxes and pay customer redemptions to favored clients. He also admitted to manipulating the bond price of MAAX Holdings, a Canadian bathroom products manufacturer, by buying up all of the outstanding bonds and demanding that
Goldman Sachs settle all outstanding MAAX transactions and deliver the bonds it owed. Falcone was well aware Goldman couldn't deliver the bonds because all of them were tied up by Harbinger. On July 4, 2014, the
SEC Office of the Whistleblower rejected a claim made by an individual requesting a reward for assisting in the investigation. The SEC rejected the claim, asserting in the "Claimant did not provide information that led to the successful enforcement". ==Personal life==