Sen. Chuck Grassley of Iowa today made the following comment on disclosure that Philip Falcone and Harbinger Capital Partners have received a Wells Notice from the Securities and Exchange Commission. For months, Grassley has questioned the Federal Communications Commission's fast-tracking of the firm's LightSquared project. Grassley is blocking consideration of two FCC nominees over the agency's refusal to provide information on why it fast-tracked the project.
"In my initial letter to the FCC on its decision to fast-track the LightSquared project, I noted that the hedge fund owner behind the project, Philip Falcone, faced ongoing SEC investigations. On July 5, 2011, I followed up by writing a letter that asked FCC Chairman Julius Genachowski if he was concerned about these multiple SEC investigations of Mr. Falcone, especially since the FCC had granted Mr. Falcone's company a $10 billion victory following a shortened comment period.
"Today, documents have been released showing that Mr. Falcone and his hedge fund, Harbinger Capital, received a Wells Notice from the SEC. While this does not mean the SEC definitely will take action against Mr. Falcone and his hedge fund, it does show that the SEC staff believes there is sufficient evidence to consider recommending an enforcement action. Now the FCC is faced with the real possibility that it made a multi-billion-dollar grant of valuable spectrum to someone who could be charged with violating securities laws. I raised this concern seven months ago. Chairman Genachowksi was dismissive. Now, more than ever, the FCC chairman should lead the effort to provide documents and offer insight into how the agency decided to give Mr. Falcone, Harbinger Capital and LightSquared this multi-billion-dollar grant."
