By Svea Herbst-Bayliss BOSTON (Reuters) - Philip Falcone, once one of the world's most closely watched investors, is stepping down as chairman and chief executive of Harbinger Group Inc. (N:HRG) next month to focus on his hedge fund and another publicly traded company.
Board member Joseph Steinberg will become chief executive at Harbinger Group, a publicly traded holding company, until a permanent replacement is found, the company said in a news release on Tuesday.
Falcone will be paid $40.3 million for the work he has done at Harbinger Group. He will also resign his position as chairman of the company's board. The moves will take effect Dec. 1.
Falcone rose to fame on Wall Street for betting against the subprime mortgage market in a move that saw his New York-based hedge fund firm, Harbinger Capital Partners, reach $26 billion in assets, making it one of the world's biggest.
He will now devote his time to the hedge fund, which still exists even after having been hit by heavy losses in recent years due to a failed wireless startup, LightSquared Inc., and to HC2 Holdings Inc. (PK:HCHC), another publicly traded company.
A year ago Falcone admitted wrongdoing and agreed to pay an $18 million fine to the U.S. Securities and Exchange Commission to settle civil fraud charges that he improperly used Harbinger hedge fund money and favored some of his investors.
He was banned from the securities industry for five years by U.S. regulators and was banned for seven years from decision-making roles at Fidelity & Guaranty Life Insurance, a unit of Harbinger Group Inc.
(Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama)