More than half a year after a landmark settlement with the Securities and Exchange Commission, the embattled hedge fund billionaire Philip A. Falcone, who also heads the publicly traded Harbinger Group, has struck a deal with the Leucadia National Corporation.
Leucadia, a conglomerate that has been compared to Warren E. Buffett’s Berkshire Hathaway because of its vast collection of businesses, increased its ownership in Harbinger, which owns majority stakes in a life insurer and Spectrum Brands, the company that includes the George Foreman brand.
The share sale is the latest in a series of moves by Mr. Falcone to focus on Harbinger after reaching an $18 million settlement with the S.E.C. in August that included his five-year ban from the securities industry. Mr. Falcone is not permitted to raise new capital for his hedge fund but can continue to act as the chief executive of the Harbinger Group.
Leucadia agreed to pay $11 a share for 23 million preferred shares in the funds managed by Mr. Falcone’s Harbinger Capital Partners hedge fund, bringing its stake in the Harbinger Group to 20 percent, according to a filing on Tuesday with the Securities and Exchange Commission.
Mr. Falcone, who made a splash betting a fortune against the United States subprime mortgage market, became the first Wall Street leader last year to admit to wrongdoing with regulators to settle an S.E.C. investigation into market manipulation. He was accused of trying to manipulate bond markets, blocking investors from redeeming their assets and using his hedge fund to pay personal taxes.
In the weeks after the settlement, which happened last summer, Mr. Falcone began to liquidate some of his assets. At the end of August, the Harbinger Group moved to take one of its insurers, Fidelity and Guaranty Life, public, seeking to raise $100 million.
In September, the Harbinger Group agreed to sell $158 million of its shares to Leucadia â€" giving it a 13 percent stake in the company. Leucadia paid $8.50 a share in September for its stake.
In a letter to investors, Leucadia’s chief executive, Richard B. Handler, called its original transaction with Harbinger a “classic example of how a unique relationship and extensive existing knowledge can lead to an appealing entry point in a public holding company at a price we find attractive.â€
Under the terms of Tuesday’s deal, which is subject to regulatory approval, Leucadia will appoint two directors to the board of the Harbinger Group. They are expected to be Joseph S. Steinberg and Andrew Whittaker, who led the transaction with Harbinger last fall.
