A lawsuit accusing hedge fund manager Philip A. Falcone and his Harbinger Capital Partners of misleading investors about the firm’s stake in LightSquared Inc. was narrowed by a U.S. judge.
U.S. District Judge Alison Nathan in Manhattan today dismissed all or part of seven of the nine counts in the lawsuit. She gave the plaintiffs one more chance to amend the complaint to address her rulings.
The investors claim Harbinger acquired an interest in LightSquared, formerly known as SkyTerra Communications Inc., without adequately warning them of the risks. Harbinger ultimately owned 60 percent of LightSquared, which was developing a high-speed wireless broadband network before it filed for bankruptcy last year.
The original suit was filed in February 2012 by Lili Schad, a Wallkill, New York, resident who said she invested $4 million with Harbinger. Schad, who seeks to represent a class of Harbinger investors, claimed she wasn’t informed that LightSquared’s plan to build the network faced obstacles from U.S. regulators.
Jacob Zamansky, a lawyer representing the Harbinger investors, said he will amend the claims disallowed by Nathan to conform to the ruling.
The case is Schad v. Harbinger Capital Partners LLC, 12-CV-1244, U.S. District Court, Southern District of New York (Manhattan).