Ex-Harbinger COO settles SEC claims he aided fraud

NEW YORK, July 28 Mon Jul 28, 2014 12:38pm EDT

NEW YORK, July 28 (Reuters) - The former chief operating officer of Philip Falcone's hedge fund Harbinger Capital Partners has agreed to pay $200,000 to resolve charges he aided a scheme to misappropriate fund assets, the U.S. Securities and Exchange Commission said Monday.

The SEC said Peter Jenson also agreed to admit wrongdoing as part of the accord, which would resolve a lawsuit the SEC launched in 2012 against him, Falcone and Harbinger.

The deal follows an $18 million settlement in August 2013 with Harbinger and Falcone, who agreed to a five-year ban from the financial industry and admitted wrongdoing as part of the pact.

Filed in 2012, the lawsuit accused Jenson of aiding and abetting Harbinger and Falcone in a scheme to misappropriate $113.2 million in order to pay the hedge fund manager's personal taxes.

"Jenson assisted a fraudulent scheme that allowed Falcone to put his own interests ahead of investors by engaging in a related party loan on favorable terms," said Julie Riewe, co-chief of the SEC enforcement division's asset management unit.

As part of the deal, Jenson also agreed to be barred for at least two years from working in the securities industry and from working as an accountant for a publicly traded company.

The settlement requires the approval of U.S. District Judge Paul Crotty in Manhattan.

Robert Pommer, a lawyer for Jenson at Kirkland & Ellis, did not immediately respond to requests for comment.

Harbinger Capital once oversaw $26 billion of assets, but that sum had fallen to less than $2 billion by the end of 2013, according to documents filed with the SEC.

The SEC's settlement with Falcone last year allowed him to remain chief executive of his publicly traded company, Harbinger Group Inc.

The case is SEC v. Harbinger Capital Partners LLC, et al, U.S. District Court, Southern District of New York, No. 12-05028. (Reporting by Nate Raymond in New York; Editing by David Gregorio)

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