Falcone to FCC: ‘Take action’ to reverse hedge fund losses

Billionaire investor Phil Falcone is turning up the heat on Uncle Sam.

Falcone, whose Harbinger Capital hedge fund owns the bankrupt LightSquared, a high-speed wireless start-up, is asking the Federal Communications Commission to take "immediate" action to stem the barrels of red ink flowing from the company.

In a letter to the FCC, Falcone is urging the regulator to "mitigate further damage" to Harbinger, which invested $3 billion in LightSquared only to see the agency pull the plug on the company in 2012.

On Wednesday, Falcone asked the FCC to take "immediate, positive action" to reverse Harbinger's losses, according to the letter sent by his legal team.

The move has some watchers betting that Falcone is gearing up to sue the FCC for botching his plans for building a nationwide 4G-LTE wireless network.

"They're putting the government on notice that they intend to sue," said telecom analyst Tim Farrar.

Indeed, the letter addresses a meeting Falcone had with the FCC last Friday — a get together that also included Justice Department officials.

"The only reason they [DOJ] would be there is to defend the federal government in the event of a lawsuit," Farrar said.

One of the DOJ officials at the meeting works in the civil department of Manhattan US Attorney Preet Bharara.

A spokeswoman for the prosecutor on Thursday declined to comment on what was discussed at the meeting.

Falcone invested billions of Harbinger's money to build LightSquared in 2010 with dreams of establishing a nationwide 4G-LTE wireless network.

But the FCC revoked its approval for LightSquared after it received complaints the network was interfering with costly navigation technology for planes and tractors.

"These problems were not of Harbinger's making," Falcone wrote in the letter to the FCC.

An e-mail released in bankruptcy court earlier this year revealed Falcone had bickered with a LightSquared debtholder over Falcone's refusal to give up Harbinger's legal claims against the FCC to speed up the restructuring plan.

"The problem is, you've threatened in so many occasions, 'well if I don't like the result, maybe I'll just sue the FCC and tie this up for 10 years.' How do we deal with that?" the debtholder asked Falcone in the email.

"I think that's a bit of an overstatement," Falcone responded.

Neither Falcone nor the lawyer who filed the letter to the FCC returned a request for comment.

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