Regulators have signaled that they may file charges over allegations that the hedge fund engaged in market manipulation involving some unnamed bonds and that Harbinger failed to tell investors that Falcone had borrowed money from the fund. The fact that Falcone’s chief lawyer is among those targeted struck some on Wall Street as unusual. “It is extremely rare to see the SEC go after a lawyer,” said one general counsel at a hedge fund who declined to be named because he is not allowed to speak to the media. He said the SEC move is an indication that general counsels are not immune from regulatory scrutiny, adding that many hedge funds’ in-house lawyers make sure they are covered by director and officers insurance.
Read more: Falcone’s lawyer on hot seat with regulators — Reuters