SEC warns LightSquared figure of potential fraud probe

posted at 12:45 pm on December 10, 2011 by Ed Morrissey

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:

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, according to people familiar with the matter.

If the name Philip Falcone sounds familiar, it should be — considering that I wrote about his LightSquared firm this morning.  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:

LightSquared also faces problems in Congress, where Republicans have accused the Obama administration of favoring the company, a charge the White House denies.

On Friday, Republican Sen. Chuck Grassley of Iowa said that the disclosure of the SEC’s Wells notice underscores the need for more information about relationships between LightSquared and telecommunications regulators.

Give the SEC at least one cheer for proceeding with the probe even with those connections; Corzine had more luck in using his clout to keep regulators off of his back.  Clearly, Congress needs to take a very, very close look at LightSquared and Falcone’s connections to the administration before taxpayer dollars flow into an enterprise that so far looks like a bust on the merits.


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SURPRISE!!!!!
Nooooooooo!
(sorry Bishop…newbie)

KOOLAID2 on December 10, 2011 at 12:49 PM

Clearly, Congress needs to take a very, very close look at LightSquared

Indeed.

Weight of Glory on December 10, 2011 at 12:49 PM

Nice name, it’s a shame the company’s going down.

The Nerve on December 10, 2011 at 12:51 PM

I dearly love Grassley and Issa. Keep up the good work guys and get to the bottom of these investigations if possible! bho and team aren’t doing a good job getting you the paperwork you need though? bho seems to have connections to all the sleaze and crooks doesn’t he?
L

letget on December 10, 2011 at 12:52 PM

Ed, here’s suggestion:
Along with your daily Obamateurism report, why not have a Barackorruption Of The Day?
You wouldn’t lack material.

itsnotaboutme on December 10, 2011 at 12:53 PM

crickets continue to chirp…

cmsinaz on December 10, 2011 at 12:56 PM

Move along, nothing to see here. These aren’t the cronies you’re looking for. Obama and media are going to have to go into overtime using the jedi mind trick.

MaximumNorthwest on December 10, 2011 at 12:57 PM

bho seems to have connections to all the sleaze and crooks doesn’t he?
L

letget on December 10, 2011 at 12:52 PM

It’s a Chicago thing.

Johnny Alamo on December 10, 2011 at 12:59 PM

How careless of the WH to let the SEC get to this point, and surely the WH will apply the quietus, if it thought it would do any good. But with the Wells notice and Congress now involved, it’s probably too late. The LightSquared cat is out of the bag.

petefrt on December 10, 2011 at 1:00 PM

Ed, here’s suggestion:
Along with your daily Obamateurism report, why not have a Barackorruption Of The Day?
You wouldn’t lack material.

itsnotaboutme on December 10, 2011 at 12:53 PM

The crony capitalism that has taken hold over the last 3 years is such a target rich environment my only fear is Issa, the SEC, and others will not have the resources to dig very far into enough of them before November.

These investigation need to accelerate after the holidays and never let up the pressure until all are resolved.

Difficultas_Est_Imperium on December 10, 2011 at 1:02 PM

Most transparent admin EVAH. Sigh.

jimfreedom on December 10, 2011 at 1:07 PM

Liberals play office; taxpayers lose. Seriously, if these people had to use their own money… oh wait, they haven’t earned any.

SteveInRTP on December 10, 2011 at 1:08 PM

The crony capitalism that has taken hold over the last 3 years is such a target rich environment my only fear is Issa, the SEC, and others will not have the resources to dig very far into enough of them before November.

These investigation need to accelerate after the holidays and never let up the pressure until all are resolved.

Difficultas_Est_Imperium on December 10, 2011 at 1:02 PM

Issa doesn’t have the stomach to do what it’s gonna take and Obama controls the DOJ. After the new year the State run medial will change the narrative and Obama will have a rebound in the polls. Gas prices down, unemployment down and a total lack of scandal in this WH will be the story.

tommy-t on December 10, 2011 at 1:09 PM

Ed, here’s suggestion:
Along with your daily Obamateurism report, why not have a Barackorruption Of The Day?
You wouldn’t lack material.

itsnotaboutme on December 10, 2011 at 12:53 PM

This!

SteveInRTP on December 10, 2011 at 1:10 PM

“It’s cool. We’ve got a guy in the DOJ.”
 
- Philip Falcone

rogerb on December 10, 2011 at 1:11 PM

“Clearly, Congress needs to take a very, very close look at LightSquared the never ending crime and corruption coming from the Obowma administration…”

There…

… that is better.

Seven Percent Solution on December 10, 2011 at 1:13 PM

“It’s cool. We’ve got a guy in the DOJ.”

– Philip Falcone

rogerb on December 10, 2011 at 1:11 PM

+1

cmsinaz on December 10, 2011 at 1:13 PM

Where does it end with these people?

rjh on December 10, 2011 at 1:18 PM

But this is the “cleanest” administration evar! Right? Right??!

watertown on December 10, 2011 at 1:19 PM

Hey guys, I have a great idea!

…Let’s elect a democrat politician from Chicago!

tom daschle concerned on December 10, 2011 at 1:32 PM

Ed, here’s suggestion: Along with your daily Obamateurism report, why not have a Barackorruption Of The Day? You wouldn’t lack material.

itsnotaboutme on December 10, 2011 at 12:53 PM

This!

SteveInRTP on December 10, 2011 at 1:10 PM

Seconded!

sage0925 on December 10, 2011 at 1:33 PM

PRESIDENT WARREN G. OBAMA without the massive tax cuts and Roaring 20′s…..BUT….with all the corruption.

How’s that Hopey Changey thing workin out for ya America?

PappyD61 on December 10, 2011 at 1:39 PM

Ed, here’s suggestion:
Along with your daily Obamateurism report, why not have a Barackorruption Of The Day?
You wouldn’t lack material.

itsnotaboutme on December 10, 2011 at 12:53 PM

How about “Cronyism of the Day”?
It’s not like it will suddenly stop when P.BO leaves office, and there will be plenty of governors engaging in it daily even if we get a squeaky clean President.
I might help keep them honest(er).

Count to 10 on December 10, 2011 at 1:39 PM

All of this fraud has been in the works for ages. How long has Obama been banging on about “rural broadband”?

forest on December 10, 2011 at 1:39 PM

But this is the “cleanest” administration evar! Right? Right??!

watertown on December 10, 2011 at 1:19 PM

It’s clearly the most laundered.

Count to 10 on December 10, 2011 at 1:40 PM

Though Mr. Obama has only had a few years to demonstrate the validity of government picking economic winners and losers, it’s clearly evident that he cannot.

mrmiji on December 10, 2011 at 1:41 PM

Racism! Partisanism! Uh….Regulatoryism! I’m sure it’s just another case of “not reading the memos!”

GarandFan on December 10, 2011 at 1:42 PM

But this is the “cleanest” administration evar! Right? Right??!

watertown on December 10, 2011 at 1:19 PM

It’s clearly the most laundered.

Count to 10 on December 10, 2011 at 1:40 PM

Ladies and gentlemen, we have a winner!

+1000

Difficultas_Est_Imperium on December 10, 2011 at 1:46 PM

I have no idea, but I do know that you guys come up with really cool names for your fake scandals. crr6 on July 10, 2011 at 1:24 PM …

hillsoftx on December 10, 2011 at 1:46 PM

Goldman Sachs again! What are they not involved in?

banzaibob on December 10, 2011 at 1:47 PM

Fraud… LighSquared… Obama campaign contributor crony… Guaranteed taxpayer loans… Regulatory approval despite their product destroying the GPS system…

I am SHOCKED, SHOCKED, to find that there is FRAUD going on here!

wildcat72 on December 10, 2011 at 1:53 PM

One more corruption story the networks won’t cover. They could an hour news broadcast just on those.

gitarfan on December 10, 2011 at 1:56 PM

This is only one example of top down government industrial policy that rewards the Government’s guys and freezes out honest businesses.

We harp on insane Federal Regulations making running a business into Russian Roulette. But the other hand clapping is the favored Government Guys who risk nothing since they have paid for a fix at the White House Permanent campaign.

It is a miracle that the Recession is not a Depression, or is it one?

A depression is when everybody stops doing any business. Obama has most of us to that point.

jimw on December 10, 2011 at 1:56 PM

It’s a Chicago thing.

Johnny Alamo on December 10, 2011 at 12:59

No it really is not and it is slightly annoying when people say this.

This Chicago ‘machine’ works. It gets things done quietly, efficiently, illegally, and has been doing so for decades. Blago stepped way off the plantation (out of the machine) and well you saw what happened to him.

But generally speaking, the enormous corruption and crime that is executed by the machine is done slickly and professionally and goes unprosecuted.

The Won is not of the machine – he’s an rank amateur hack. What you’re seeing is disorganized, amateurish hoods who really are not part of the machine at all.

Criminals come in several forms. Professionals, Amateurs, and Opportunists. The Regime is composed largely of the latter two.

CorporatePiggy on December 10, 2011 at 1:58 PM

Where is OWS in protesting this kind of thing?

juliesa on December 10, 2011 at 2:00 PM

Won’t they just give him a job at Fannie & Freddie?

Cindy Munford on December 10, 2011 at 2:00 PM

PRESIDENT WARREN G. OBAMA without the massive tax cuts and Roaring 20′s…..BUT….with all the corruption.

How’s that Hopey Changey thing workin out for ya America?

PappyD61 on December 10, 2011 at 1:39 PM

+1

luckedout26 on December 10, 2011 at 2:03 PM

Ed, here’s suggestion:
Along with your daily Obamateurism report, why not have a Barackorruption Of The Day?
You wouldn’t lack material.

itsnotaboutme on December 10, 2011 at 12:53 PM

Pick any topic that SCoaMF promotes, and there is likely a failing company using a bundler to buy influence the Chicago Way.

There should be additional scandals just waiting to be found related to big Obama donors, stimulus “investments” and Obama speech themes.

WhatNot on December 10, 2011 at 2:03 PM

I see an investigation into the SEC coming in 3.2.1…

Talibill on December 10, 2011 at 2:04 PM

I have a feeling Palin is going to have a lot of fun with this, it is right in her wheelhouse.

KBird on December 10, 2011 at 2:15 PM

Barackorruption

itsnotaboutme on December 10, 2011 at 12:53 PM

That is priceless! Bumper stickers … t-shirts … election ads -

It should be the keyword of this election cycle.

Reminds me of the famous “Go Lie” t-shirts from FreeRepublic when Gore and Lieberman ran.

Josiah on December 10, 2011 at 2:38 PM

How about “Cronyism of the Day”?
It’s not like it will suddenly stop when P.BO leaves office, and there will be plenty of governors engaging in it daily even if we get a squeaky clean President.
I might help keep them honest(er).

Count to 10 on December 10, 2011 at 1:39 PM

The top story(s) would actually be Rick Perry, and there’s a problem with that because he is Ed and Tina’s favorite candidate.

Mcguyver on December 10, 2011 at 2:55 PM

Dang! A version of those Go-Lie t-shirts are still for sale!

Josiah on December 10, 2011 at 3:17 PM

I have no idea, but I do know that you guys come up with really cool names for your fake scandals. crr6 on July 10, 2011 at 1:24 PM …

hillsoftx on December 10, 2011 at 1:46 PM

Even the new folks have crr6 nailed down. That HAS to hurt…

Kraken on December 10, 2011 at 3:25 PM

Yes, this will be a huge story just like it was when Tony Rezko was sent to prison last month. Ya’ll remember that all over the news, right? Oh wait…….!!

GeorgiaBuckeye on December 10, 2011 at 3:28 PM

The LightSquared fiasco is more about political pressure being brought to permit the use of frequencies that were designed for satellite use at very low power levels to be used for terrestial high power links. The the closenesss of these frequencies to GPS has many GPS users concerned, especially for air traffic control and precision landing systems.

The White House has pressured at least two senior USAF officers to push for expedited approval in testimony before the FCC. The whole thing smells to high heaven. Today’s story Falcone is under investigation hopefully will end the corrupt allocation of priceless GPS frequencies to political cronies.

Corky Boyd on December 10, 2011 at 3:53 PM

Fascinating article on Falcone – how he made his billions short-selling sub-prime mortgage equities.

fred5678 on December 10, 2011 at 4:18 PM

bho seems to have connections to all the sleaze and crooks doesn’t he?
L

letget on December 10, 2011 at 12:52 PM

Yep, and they’re all on speed dial in the Chicago area code…

stacman on December 10, 2011 at 4:19 PM

I have no idea, but I do know that you guys come up with really cool names for your fake scandals. crr6 on July 10, 2011 at 1:24 PM …

hillsoftx on December 10, 2011 at 1:46 PM

Even the new folks have crr6 nailed down. That HAS to hurt…

Kraken on December 10, 2011 at 3:25 PM

Imitation is the sincerest form of flattery, but can we please confine this particular crr6 Greatest Hit Quote to the Fast and Furious threads?

Here’s another one good for any thread…

Poor minds think alike!

crr6 on June 12, 2011 at 4:22 PM

Del Dolemonte on December 10, 2011 at 4:20 PM

Obama Miracle is White House Free of Scandal: Jonathan Alter

http://www.bloomberg.com/news/2011-10-27/obama-miracle-is-white-house-free-of-scandal-commentary-by-jonathan-alter.html

CoffeeLover on December 10, 2011 at 4:20 PM

Don’t any of these business men/women have any ethics at all?

Surely, they missed the ethics classes in elementary/secondary/ university classes. What’s that, they don’t have them any more?

Well, I guess we can see why we are in such a mess. The dems don’t want to call anything bad, just depends on your thought process. Isn’t that kind of what holder said?

Bambi on December 10, 2011 at 4:26 PM

I know that republicans can be as venal as anybody else, but it sure seems that ALL of the big corruption cases coming out have Obama and the DemocRATS in common.

baron scarpia on December 10, 2011 at 4:50 PM

Press has been constantly reporting Obama’s going to be raising a billion dollars for next years campaign. So what are the chances they’ll be reporting he’s raised 1.2 billion already?

chickasaw42 on December 10, 2011 at 7:39 PM

Have another drink America..your gonna need it…

txdonboy on December 10, 2011 at 8:04 PM