SEC Boots Deal with Falcone; Will He Now Fly into the Arms of Dish Network?

Harbinger Capital is the hedge fund group of Falcone’s Harbinger Group Inc. (NYSE: HRG), and Harbinger Group notified investors in three hedge funds of the rejected deal late yesterday.

Falcone and Harbinger have sunk more than $3 billion into wireless network provider LightSquared Inc., but that company is now in bankruptcy proceedings following a frustrated effort to overcome interference issues in its wireless spectrum holdings. In May, Dish Network Corp. (NASDAQ: DISH) offered to pay LightSquared $2 billion for the spectrum and instead of negotiating, LightSquared filed suit charging Dish and chairman Charlie Ergen with violating an agreement on LightSquared’s restructuring.

Does Dish’s offer look any better today? Falcone’s personal fortune has been estimated at $1.2 billion and that’s certainly enough to get him over a few bumps in the road. But Harbinger’s investors might like to recover at least some of the money the Harbinger funds dropped on LightSquared and they might now be in a better position to demand that Falcone at least sit down with Ergen outside a courtroom.