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Stories of Interest
- Banca IMI Securities to Pay $35Mn for Improper Handling of ADRs in Continuing SEC Crackdown
- Members of White House ‘Arts Panel’ Resign En Masse in Protest of Trump
- FINRA Whiffs on Disciplinary Sanction: Bill Singer's 'Negligent Market Manipulation in OTC Stock Promotion'
- Heather Heyer’s Mother Says, ‘I’m Not Talking to the President’
- Goldman Sachs May Have Lost $100Mn on Energy Bet Gone Wrong
- SEC Drops Case Against Ex-JPMorgan Traders Over 'London Whale'
- Financial Advisers That Invest in Technology Need to Accomplish These Two Things
- FINRA Amends Codes Regarding Expedited Arbitrator List Selection
- FINRA July 2017 Quarterly Disciplinary Review (Podcast)
- Senior Exec in Citigroup's Equities Unit Has Left
- Prudential Plotting its Escape From Fed's Tough Oversight
- Why CEOs Spurned Trump's Business Councils, in Their Own Words
- A Stockbroker, Her LLC, and Her Customers' Loans (Or Investment?) - Bill Singer
- Brian Quintenz Sworn In as CFTC Commissioner
- A Gary Cohn Resignation Would 'Crash the Markets' – Mgmt Guru Jeffrey Sonnenfeld
- Trading Firm DRW to Buy RGM Advisors - As Low Volatility Forces Out Weak HFT Players (subsc reqd)
- Reputational Damage - Rajat Gupta on Hard Road to Recovery
- 7th Circuit Affirms Spoofing Conviction - Bill Singer
- Wells Fargo Announces Board Changes
- Judge Rules Against Ex-Goldman Employee in Fed Leak Case
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NEWSLETTERS & ALERTS
Whistleblower Gets $8.8Mn Award on Harbinger Fund Tax Evasion Case
A whistleblower was awarded $8.8 million in connection with a groundbreaking settlement by New York State Attorney General Eric Schneiderman. The unnamed individual had alleged that investment managers for Phil Falcone’s Harbinger Capital Partners, a $26 billion hedge fund based in New York City, had failed to pay taxes on performance income for several years.
In the largest-ever recovery of its kind, Attorney General Eric Schneiderman announced last Tuesday that Alabama-based Harbert Management Corporation and top executives at the firm agreed to pay $40 million to settle tax evasion charges. According to Schneiderman:
- Harbert was the fund sponsor for Phil Falcone’s Harbinger Capital Partners, a $26 billion hedge fund based in New York City.
- Harbinger Capital Partners Offshore Manager served as the investment manager for the Harbinger Fund from 2002 through 2009.
- Philip Falcone and the other members of the investment team operated in New York City, at offices that were located at 555 Madison Avenue in Manhattan.
- As investment manager, Offshore Manager earned performance fee income in an amount equal to 20% of the Harbinger Fund’s net profits.
- Offshore Manager’s members, which included several senior executives at Harbert Management Corporation, were required to pay NYS income tax on this performance fee income earned by Mr. Falcone’s trading activity in New York.
The basis for the settlement is that, when businesses operate both inside and out of New York City and State, they must apportion for tax purposes that part of their income derived from or connected with New York.
[Click on Schneiderman Announcement for further specifics on the case.]