Hedge Fund Chief In Exile Is Stepping Down

Philip A. Falcone, the hedge fund manager who made billions betting against the housing market and then lost a bundle trying to build a wireless network, is once again trying to reinvent himself.

In a surprising move, Mr. Falcone is stepping down as the chief executive and chairman of the Harbinger Group, a publicly traded company that owns stakes in the maker of the George Foreman grills and a life insurance company. The Harbinger Group announced the decision in a news release on Tuesday, just days after it filed its most recent annual report, which was signed by Mr. Falcone.

In leaving the Harbinger Group, Mr. Falcone will receive a lump-sum payment of $20.5 million. He will also get $19.8 million in bonus money that the Harbinger Group said he had earned for his service to the company.

Mr. Falcone agreed last year to be barred from working in the securities industry for at least five years as part of a settlement with the Securities and Exchange Commission that stemmed from violations at his hedge fund, Harbinger Capital Partners. The settlement did not prohibit him from managing a public company.

Mr. Falcone, in an email, rejected speculation that the lump sum payment might indicate he was in need of cash.

''Not at all,'' said Mr. Falcone in the email. ''Not even close.'' Forbes magazine this year listed Mr. Falcone's net worth at $1 billion.

Mr. Falcone said he had decided to step down from the Harbinger Group so he could focus more attention on building a new publicly traded venture called HC2 Holdings, which appears to be buying stakes in companies much the way the Harbinger Group did.

James Hart, a spokesman for the Harbinger Group, said Mr. Falcone's move was not driven by any regulatory pressure. The resignation is effective on Dec. 1.

Joseph S. Steinberg will become the Harbinger Group's chairman as the company searches for a new chief executive. Mr. Steinberg, who is already on the company's board, is chairman of Leucadia National, a holding company that invests in a variety of businesses.

Some have compared Leucadia's strategy of investing in companies to that of Berkshire Hathaway, the company led by Warren E. Buffett. In building up the Harbinger Group, Mr. Falcone was seen as trying to mirror the strategy of both Leucadia and Berkshire Hathaway.

Mr. Falcone's hedge fund is still battling in United States Bankruptcy Court over the future of LightSquared, a wireless company that went bust in 2012 after the hedge fund invested several billion dollars in it. Mr. Falcone and his hedge fund are resisting a restructuring plan that would give Charlie Ergen, chairman of the Dish Network, a controlling stake in the troubled company.

At the end of September, Mr. Falcone's hedge fund was the Harbinger Group's largest shareholder, owning more than 47 million shares.