The SEC introduced a policy in June which requires companies and individuals to admit wrongdoing when their behaviour is seen as being 'egregious'. Mr Falcone and his hedge fund Harbinger Capital Partners, which will pay $6.5 million, will be banned from operating in the securities sector for the next five years. Mr Falcone admitted favouring some investors over others when assets which were tied up in the Lehman Brother collapse would not be sufficient to pay all investors in full. He also accepted that he had favoured himself, making an illegal loan to himself of $113 million.
David Marder, formerly an assistant district administrator at the SEC and now a partner in Robins, Kaplan, Miller & Ciresi, told The Daily Telegraph: 'This case is important in that people will look at the factors in this case and compare them to the factors in their case going forward.'
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