Harbinger Capital Gets Wells Notices

Harbinger Capital Partners has been put on notice by the Securities and Exchange Commission that it could face a lawsuit for securities-fraud violations, according to published media reports.

The hedge fund, run by billionaire Philip Falcone, also said that it anticipates halting investor withdrawals at the end of the year, according to a Bloomberg report.

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The fund disclosed the developments on Friday to its clients, the report said.Falcone, 49, and Harbinger executives Omar Asali and Robin Roger, received Wells Notices from the SEC, the report added. The SEC sends out such notices when it has decided it may a civil suit against a person or company. Recipients have the opportunity to provide information explaining why the agency should not file the suit.Harbinger is famous for betting successfully against subprime mortgages, but the fund has been under investigation by the SEC for a loan that it made to Falcone so that he could pay off a personal tax bill.Harbinger's assets have decreased from $26 billion three years ago to $5.7 billion, the Bloomberg report said.In its communications to clients Friday, Harbinger said it "anticipates" suspending withdrawals from its main hedge fund on Dec. 30, the report added. Harbinger told investors it "believes that the decision to temporarily suspend withdrawals is necessary when balancing the preservation of value for all Feeder Fund investors," the report said.

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