Falcone’s Funds Sell Harbinger Group Shares to Leucadia

Philip Falcone’s hedge funds sold $158 million of Harbinger Group Inc. (HRG) shares to Leucadia National Corp. (LUK) as the money manager meets redemption requests after reaching a settlement with U.S. regulators.

Three funds run by Harbinger Capital Partners LLC sold a combined 18.6 million shares of Harbinger Group, a publicly traded holding company run by Falcone, for $8.50 a share, according to a Securities and Exchange Commission filing yesterday. The transaction makes Leucadia the second-largest holder, with a stake of about 13 percent in the New York-based company that runs businesses including life insurance and pet supplies, according to data compiled by Bloomberg.

Falcone, 51, and Harbinger Capital agreed in August to meet investor redemptions under the supervision of an independent monitor as part of an $18 million settlement with the SEC. The accord also includes a five-year ban from the securities industry and an admission of wrongdoing for improperly borrowing money from his funds to pay his personal income taxes.

Leucadia agreed last year to buy Jefferies Group LLC in a $3.2 billion deal that put Richard Handler, who was running the investment bank, in charge of the combined company when the transaction was completed in March. New York-based Leucadia also has investments in industries including beef processing.

The hedge funds sold an additional 5.1 million shares to other, undisclosed investors, according to the filing.

Harbinger Group rose 0.5 percent yesterday to $10.06 in New York trading. The shares have climbed 31 percent this year.

Steven Goldberg, a spokesman for Harbinger at RLM Finsbury, declined to comment on the transaction. Laura Ulbrandt, a spokeswoman for Leucadia, didn’t immediately return a call seeking comment.

To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net; Dan Kraut at dkraut2@bloomberg.net

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