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Movers & shakers: Nov. 26, 2014

by Baz Hiralal

Philip Falcone is resigning as chairman and CEO of publicly-traded conglomerate Harbinger Group Inc. Falcone, who became a billionaire betting against subprime mortgages before the financial crisis, arrived at Harbinger in 2009. He picked up a controlling stake in the former Zapata Corp. with his hedge fund Harbinger Capital Partners LLC, which is winding down. In 2012, the Securities and Exchange Commission charged Falcone with fraud, accusing him of using $113 million of firm money to pay his personal taxes and favoring certain clients, such as allowing Goldman, Sachs & Co. to retreat from the shrinking fund. He settled in May 2013 with a two-year ban and no admission of guilt. But, in a rare move, the commissioners decided not to approve the settlement and he ended up settling again, this time for $18 million. Falcone also admitted wrongdoing but was allowed to run Harbinger Group. Falcone was banned for five years from the securities industry.

Independent board member Joseph S. Steinberg, who will become chairman, said in a statement that during Falcone's tenure, "the company experienced significant growth and success, beginning with approximately $140 million market capitalization in 2009 rising to today's market capitalization of approximately $2.6 billion." The investing style has been compared to that of Warren Buffett's Berkshire Hathaway Inc., something Falcone will likely mirror with investment vehicle HC2 Holdings Inc. (formerly PTGi Holding Inc.). Steinberg is co-founder of Leucadia National Corp., which became Harbinger's second largest shareholder this year. Leucadia, owner of Jefferies Group Inc., has been called a 'mini-Berkshire.'

Falcone's parachute includes a lump sum payment consisting of a $20.5 million one-time payment, $16.5 million for his previously awarded annual bonus for fiscal year 2014 and $3.3 million as a pro-rata bonus for fiscal year 2015. Other than HC2, Falcone has frequented headlines for his involvement with bankrupt wireless broadband owner LightSquared Inc. He is contesting a court deal that would give control to Dish Network Corp. chairman Charlie Ergen, filing a $2 billion lawsuit.

In addition, Keith Hladek, an HGI director, will also resign from the board to work with Falcone.

HGI is looking for a new CEO.


Mackenzie Financial Corp. added Todd Mattina as chief economist and strategist, asset allocation team. He was previously with the International Monetary Fund, including two years as deputy division chief, fiscal operations. Prior to that, Mattina was a portfolio manager, global tactical asset allocation, with the Canada Pension Plan Investment Board.

Mackenzie is a member of the IGM Financial Inc. group of companies.


Standard Chartered plc enlisted Euan Campbell as global head, retail segments for retail clients. He joins the Asia-focused bank from Santander Group, where he was an executive vice president responsible for the strategic direction of its U.S. cards business.


H. Paulett Eberhart joined the board of LPL Financial Holdings Inc. and will serve on the audit committee. Eberhart was president and CEO of CDI Corp. from 2011. Previously, she was president and CEO of Invensys plc, chairwoman and CEO of HMS Ventures, and held senior roles at EDS Corp.


Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners, said Subash Chandra joined its New York research team as a managing director and senior equity analyst covering energy exploration and production. Chandra was most recently a senior analyst at Jefferies LLC, where he led a team covering E&P companies since 2007 and was responsible for the firm's natural gas forecasts. Earlier, he worked for nine years as a senior exploration and production analyst in Houston with Morgan Keegan & Co.


Wilson Sonsini Goodrich & Rosati PC said John P. Flynn, representing clients in corporate and commercial disputes, joined the firm's litigation practice as a partner in San Francisco. Prior to this, he was a partner at McLeod, Witham & Flynn.

Flynn started his law career in New York at Skadden, Arps, Slate, Meagher & Flom LLP. In 1988, he moved to Los Angeles, joining Latham & Watkins LLP as an associate. In 1993, he joined Dewey Ballantine LLP and became a partner in 1997. Flynn returned to Latham in 2001 as a partner before leaving in 2008 to help found McLeod, Moscarino, Witham & Flynn.


Proskauer Rose LLP added Sandra Lee Montgomery, formerly of Bingham McCutchen LLP, to its Los Angeles office as a partner. She has represented financial institutions, lenders and private equity funds in commercial and corporate finance, asset-based lending, subordinated debt finance, secured and unsecured lending, and related workout transactions.


BKM Capital Partners, announced its board of advisers includes former CEO/chairman of Morgan Stanley John J. Mack, Paul Dolinoy, former president of Equitable Real Estate Investment Management, and Jeff Gehl, managing principal and co-founder of RCP Advisors.

The Irvine, Calif., fund manager also hired Michael Hernstad, formerly of Colony Capital, as director of finance and accounting, and Charlie Ittner, formerly of Platinum Equity LLC, as director of investor relations.

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Philip Falcone is resigning as chairman and CEO of publicly-traded conglomerate Harbinger Group Inc.


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