The Wall Street Journal reported late Friday that investors are now suing billionaire Philip Falcone and his Harbinger Capital Partners LP fund, which bankrolled LightSquared for billions of dollars. The suit, which was filed in the Southern District of New York, alleges Mr. Falcone made "deceptive and misleading statements" by not disclosing that he intended to form the wholesale wireless operator, the paper reports.
Earlier this week, the Federal Communications Commission (FCC) said it would block the company's proposed Long Term Evolution (LTE) network because it would interfere with satellite positioning services. LightSquared's CEO Sanjiv Ahuja said Thursday that the company has already spent "nearly $4 billion" in its attempt to get the abortive hybrid satellite and terrestrial LTE service off the ground.
Why this matters
LightSquared's investors have sunk billions into a network that never got past the conditional waiver stage from the FCC. A major lawsuit, meanwhile, could potentially hamper any possible spectrum swap deal that Falcone may try to pull off.
For more Track LightSquared's flame-out across the year:
- LightSquared CEO Calls FCC 'Irresponsible'
- LightSquared Responds to the FCC
- FCC Moves to Block LightSquared
- FreedomPop Bets on 4G With Clearwire
- NTIA Kicks LightSquared While It's Down
- Public Sucked Into LightSquared Squabble
- LightSquared's War of Words
- LightSquared Calls GPS Tests 'Rigged'
- Government Agencies Blast LightSquared
- Sprint Gives LightSquared 30-Day Extension
- 2011 Top Ten: LightSquared in the Limelight
- LightSquared Files GPS-Test Data
- LightSquared to GPS Industry: Get Bent
- NDAA Bill Would Let Military Block LightSquared
- Sprint's $13.5B Jump to LTE With LightSquared
- LightSquared Plans LTE Launch Next Year
- LightSquared 'Confident' of FCC Approval in 2012
— Dan Jones, Site Editor, Light Reading Mobile