New York Regulator Bans Falcone From Insurance Business

Updated, 12:32 p.m. | With statement from Harbinger Group.

New York’s top financial regulator on Monday banned the hedge fund manager Philip A. Falcone from any involvement with a New York insurer.

Benjamin M. Lawsky, New York’s superintendent of financial services, said in a statement that Mr. Falcone was banned from “exercising direct or indirect control over the management, policies, operations and investment funds” of any insurer with New York operations.

Mr. Lawsky’s action came nearly two months after the Securities and Exchange Commission banned Mr. Falcone from the securities industry for five years as part of a settlement related to several charges including of market manipulation.

But as part of the settlement, the S.E.C., in a rare move, extracted an admission of wrongdoing from the billionaire investor, signaling a shift from its longstanding policy of allowing defendants to “neither admit nor deny” wrongdoing.

Mr. Falcone also agreed to pay $18 million to settle several charges.

Mr. Falcone’s admission of wrongdoing on Aug. 19 and the S.E.C. settlement demonstrated “serious issues related to Mr. Falcone’s fitness to control the management, operations, and policyholder funds of a New York insurance company,” Mr. Lawsky’s office said in a statement on Monday.

Mr. Falcone’s hedge fund Harbinger Capital owns Harbinger Group, a holding company that owns the insurer Fidelity and Guaranty Life.

Fidelity and Guaranty Life, based in Baltimore and with operations in New York, sells fixed annuities and life insurance products. On Aug. 29, just over a week after Mr. Falcone settled the S.E.C. charges, the Harbinger Group moved to take Fidelity and Guaranty Life public. In a prospectus filed with the S.E.C., it disclosed plans to raise $100 million.

Referring to the S.E.C. settlement on Monday, Mr. Lawsky’s office said it “may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organization, licensing boards, and other regulatory organizations.”

Mr. Lawksy has a reputation as a hard-charging bank regulator, most recently charging the British bank Standard Chartered with money laundering.

In a statement, a spokesman for Harbinger Group said, “Harbinger Group takes its obligations with regulators very seriously and we look forward to continuing to manage Fidelity & Guaranty Life for the long term.”