(Bloomberg News) Philip Falcone, the billionaire founder of Harbinger Capital Partners LLC, faces a lawsuit from U.S. regulators as soon as this week over claims he improperly borrowed client funds to pay his taxes and gave preferential treatment to Goldman Sachs Group Inc., according to two people familiar with the matter.
Falcone, 49, may also face a market manipulation claim related to trading in bonds of MAAX Holdings Inc., said the people, who asked not to be identified because the matter isn't public. The Securities and Exchange Commission voted to authorize enforcement staff to file the case, the people said.
Falcone plans to contest the suit, said another person briefed on the matter. Falcone wasn't immediately reachable to comment, according to a spokesman. Florence Harmon, a spokeswoman for the SEC, declined to comment.