Philip Falcone, a Democratic donor who is currently banned by U.S. regulators from participating in the securities industry, is attempting to make a financial comeback by going around the ban and purchasing entire companies, according to the New York Times.
Falcone looks at his new venture, a publicly traded company worth $800 million called HC2 Holdings, as a way to exact "revenge."
For Mr. Falcone, the goal is to make smart acquisitions and hit home runs with some of the smaller earlier-stage ventures, much as he once did by buying bonds of companies in financial distress.
The new venture also allows him to stay active during a regulatory ban that bars him from the securities and investment advisory businesses until 2018; regulators have allowed him to run a public company that buys whole businesses instead of managing a fund trading stocks and bonds.
In an interview, Mr. Falcone said he was aiming to "go out and acquire companies and build on that," creating value through growth in diverse industries.
"I feel like, not that I have a lot to prove, but I look at this vehicle as ‘success is the best revenge,’" he added.
Falcone accepted a five-year ban from the Securities and Exchange Commission for improperly using funds at his hedge fund, Harbinger Capital. He also paid an $18 million fine for civil fraud charges.
Regulators said Falcone’s actions "read like the final exam in a graduate school course in how to operate a hedge fund unlawfully." One of his many missteps at the fund was using $113 million of investor money to pay his own personal taxes.
Some have questioned whether Falcone was receiving preferential treatment from the White House, which appeared to be working to help LightSquared, a broadband company owned by Falcone, be approved for a major wireless project.
A military general was pressured by the White House to change his testimony to downplay concerns that the LightSquared project might interfere with military GPS—the issue that would eventually cause the Federal Communications Commission to torpedo the project.
LightSquared would later go into bankruptcy, causing major financial losses for Harbinger.
Falcone's current attempt to rise from the ashes also "faces hurdles," according to the Times report.
Its stock price has fallen by 40 percent this summer and multiple big deals have fallen apart due to concerns by others about the SEC cloud that surrounds Falcone.
The company currently shares an office in New York City because it is unable to afford the rent of the office space on its own.
Falcone was forced to sell his minority ownership stake in the NHL’s Minnesota Wild last year.