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Phil Falcone's Rotten, Awesome Day

Hedge-fund manager Philip Falcone of Harbinger Capital Partners

Photograph by Jacob Kepler/Bloomberg

Hedge-fund manager Philip Falcone of Harbinger Capital Partners

Phil Falcone, a Harvard hockey standout, may score one from the penalty box.

On the same day news broke of his two-year ban from Wall Street, the hedge fund billionaire got word that LightSquared, one of his major investments, will likely get a green light from the Federal Communications Commission.

FCC Chairman Julius Genachowski said he expects the fledgling wireless business eventually to win approval to use its airwaves. The LightSquared slice of the spectrum is “too valuable” to be left idle, Genachowski told investors at a New York conference today.

While Falcone can probably manage to survive two years away from running money and raising funds, a loss on LightSquared would have been harder to stomach. His Harbinger Capital had invested about $3 billion in the telecom venture—buying about three-quarters of it and promising to swipe market share from Verizon Wireless and AT&T (T).

The FCC, however, was concerned that LightSquared’s network would gum up GPS units, including those that help steer planes. Federal regulators blocked LightSquared early last year, and the company filed for bankruptcy protection in May.

Recently, the company has been working on a plan to share airwaves with federal weather balloons and satellites.

Meanwhile, the SEC settlement banning Falcone from acting as an investment adviser allows him to continue as chief executive of Harbinger. The allegations were enough to scare any Master of the Universe. SEC attorneys said Falcone took a $113 million loan from his fund to pay personal taxes and continued to renovate his $49 million townhouse, while almost two-thirds of his investors had unfulfilled redemption requests.

But any clients put off by those charges likely bolted long ago. And if the LightSquared play pays out, Harbinger’s $18 million SEC fine will be a lot easier to tolerate.

Stock is an associate editor for Twitter: @kylestock

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