April 18 Harbert Management Corporation and its
top executives agreed to pay $40 million to settle with New York
over allegations that it failed to pay state taxes on
performance income for several years, according to the New York
Alabama-based Harbert Management was the fund sponsor for
Harbinger Capital Partners, a $26 billion hedge fund based in
New York, New York Attorney General Eric Schneiderman said in a
Schneiderman said Harbert hired Philip Falcone as its
primary decision maker for the Harbinger Capital Partners Master
Fund Ltd hedge fund.
Falcone and others on the investment team operated out of
Manhattan. When businesses operate in and out of New York, they
must allocate the income they derive from New York for tax
The accord resolves claims against Harbert and Alabama-based
members of Harbinger Capital Partners Offshore Manager LLC.
Schneiderman said it was the largest tax-related recovery by
the New York attorney general's office, stemming from a 2010
change in the state's False Claims Act to cover tax claims.
(Reporting by Karen Freifeld)