Peregrine Financial Group founder Russell Wasendorf Sr. pleaded guilty to charges that he stole about $200 million from clients at the futures firm. It was initially believed that Mr. Wasendorf would be set free pending sentencing, the judge ordered the fraudster held behind bars pending a determination on the flight risk posed by the Iowa man. Meanwhile, Wasendorf's son, Russell Jr., sued U.S. Bank for allegedly failing to supervise properly the transfer of customer funds.

Lenders to embattled broadband wireless company LightSquared want permission to go after Harbinger Capital, the hedge fund founded by Phil Falcone, in bankruptcy proceedings, The Wall Street Journal says.

A Morgan Stanley infrastructure fund is tripping over the Volcker rule, which dictates how much of its own capital a bank can risk, according to Reuters. Some senior executives have left the firm rather than accept a smaller share of profits.

SEC Chairman Mary Schapiro is on medical leave, according to The New York Post, and may leave the agency before her term expires in 2014.

Andrew Ross Sorkin relegates the Occupy Wall Street to the dustbin of history, along with the misfits and vagabonds he says diminished the movement.

Harvard grads are earning less than alumni of the South Dakota School of Mines & Technology, says Bloomberg.

Short sellers have more than doubled their bets against Manchester United since the British soccer club that went public in a U.S. offering this summer, according to the Telegraph (h/t Business Insider).

LightSquared, the wireless broadband company backed by Harbinger Capital founder Phil Falcone, is battling with creditors over control of the firm's bankruptcy, according to Bloomberg. LightSquared has asked a judge to extend a deadline to file a Chapter 11 plan; the creditors say, "Having nothing to lose, Mr. Falcone wants to pursue a high-risk, high-return strategy."

Facebook shares may get a bump when the stock is added to the Nasdaq 100, an index of the exchange's non-financial firms. It may not be enough to make up for Nasdaq's botched handling of the Facebook IPO, but every little bit helps...

Commodities giant Glencore upped its offer for Xstrata, the mining company, in hopes of completing a long-anticipated merger. It remains to be seen whether Qatar Holding, the sovereign wealth fund of the Middle Eastern nation, which holds a 12 percent stake in Xstrata, sign off on the new deal. Qatar's hesitance lead Business Insider to wonder if we are seeing the rise of a new kind of activist investor.

The head of the JPMorgan's chief investment office hopes his new gig is a "boring job.

After Dewey & Laboeuf folded, the law firm's softball team lived on.

A predecessor to SunTrust Banks invested in Coca-Cola in 1919, according to Bloomberg. What was worth $100,000 then is worth more than $2 billion now, and the firm is cashing most of the shares to cover bad loans and other costs associated with the financial crisis.

On Goldman Sachs, Morgan Stanley and Wall Street's courtship of fixed-income investors (now with conference calls!).

Sub-par returns from brand-name private equity firms are dragging on public-employee pension funds.

French President Francoise Hollande is said to be backing down on a proposed 75 percent tax on million-euro wage earners. A revised plan would reportedly lower the top tax rate to 67 percent, and raise the threshold for couples to 2 million euros.

... at 2:25 p.m., 48-year-old Lisa Marie Falcone of Manhattan crashed her vehicle at the corner of Montauk Highway and Hayground Road in Bridgehampton, police said.

She was found to be to be under the influence of alcohol and prescription medication, police said.

Falcone was charged with driving while ability impaired by the combined influence of alcohol and drugs.

The last time we checked in on the Falcones, Phil was battling creditors of LightSquared, the broadband wireless company in which his hedge fund, Harbinger Capital, holds a majority stake, and shrugging off Securities and Exchange Commission charges that he misappropriated Harbinger funds.

Update (4:23): from FINalternatives (h/t Dealbreaker):  "[Ms.] Falcone was charged after admitting to having a drink three hours before driving, and that she had a blood alcohol level of 0.03, about half the legal limit. Falcone was also asked if she was on prescription medication, which she confirmed."

Blow back: Jamie Dimon went on Meet the Press and said JPMorgan was "dead wrong" to dismiss early stories of the massive position in credit derivatives accumulated by the bank's chief investment office and the trader nicknamed the London whale. “We got very defensive, and people started justifying everything we did,” Dimon said.

Ina Drew, the JPMorgan executive who loves crisis, is expected to resign today after the bank lost more than $2 billion on a credit derivatives trade she oversaw. Achilles Macris, the executive who oversaw the London-based operation that placed the trades, and trader Javier Marin-Artajo, are also on their way out, the Wall Street Journal reports.

It appears the chief investment office's entire London operation could be dismissed.

Cover up: Who knows what would have happened if Yahoo CEO Scott Thompson had come clean about his resume from the start—in the end it was Mr. Thompson's lie about how the gratuitous degree in computer science first appeared that led to the executive's resignation.

Yahoo named Ross B. Levinsohn—its head of global media and the former News Corp. exec who presided over that company's $580 million takeover of MySpace—as interim CEO.

Meanwhile, Third Point Capital, which led the call for Mr. Thompson's resignation, will end its proxy fight after Yahoo agreed to give the hedge fund three seats on its board of directors, including one to Third Point founder Dan Loeb.

Love letter:  Noster Capital, a London-based hedge fund that owns a small stake in Chesapeake Energy, is calling on CEO Aubrey McClendon to step down. Noster cited more than $1 billion in personal loans secured by Mr. McCLendon's stake in Chesapeake wells, the recent disclosure of off-balance sheet liabilities and...the catering in a letter signed by founder Pedro de Noronha.

Activist investor Carl Icahn, meanwhile, is expected to disclose that he has taken a large stake in Chesapeake.

Filing looms: The board of directors for Residential Capital, the mortgage unit at Ally Financial, is on the verge of filing Chapter 11 bankruptcy. Fortress Investment Group is expected to bid $2.4 billion for the majority of ResCap's assets when the long awaited filing goes through, while the Times lists hedge fund Elliot Management as among the Ally investors that oppose an asset sale.

Filing looms, too: LightSquared executives spent the weekend prepping for bankruptcy court, after negotiations with lenders stalled. LightSquared, the wireless venture backed by Phil Falcone's Harbinger Capital, has until 5 p.m. today to reach an agreement with lenders.

Greek re-vote: Alexis Tsipras, the Syriza party leader who would tear up the rescue plan struck with the European Union, is poised to finish first in the next round of Greek elections, raising the specter of a messy eurozone divorce.

Sales call: Avon is considering a $10.7 billion takeover offer from rival Coty, after rebuffing previous advances.

[DON EMMERT/AFP/Getty Images]

Reuters reports:

"HGI is vastly overpaying for the acquisition of assets from its majority and controlling shareholder," according to the suit, which was filed by Harbinger Group investor Alan Kahn in Delaware Chancery Court on Tuesday. Kahn sued Falcone, other directors and Harbinger Group itself.

A lawyer for Kahn, Harold Obstfeld, declined to comment beyond the suit.

A spokesman for Falcone and Harbinger Group called the suit "meritless" and said the defendants will seek to have it dismissed. "This transaction was reviewed at Harbinger Group by an independent committee of directors advised by outside financial and legal advisors. The conclusion from this process was that the transaction was in the best interests of the shareholders," Jeff Zelkowitz said.

Another deal for Mr. Falcone, and more eyebrows raised. At least his children seem to have a bright future.

mtaylor [at] observer.com | @mbrookstaylor

According to documents filed with the New York City Department of Finance, Mr. Falcone and his wife took out a $22.5 million mortgage on their upper-east side townhouse this summer.

A spokesman told The Journal: "This is a normal ordinary course mortgage financing on Mr. Falcone's home that was completed seven months ago and has no relevance to Harbinger Capital Partners' business or its investors."

Fair enough!

mtaylor [at] observer.com | @mbrookstaylor

But Reuters is reporting that he may have a more cumbersome problem.

According to its item, a regulatory filing for Harbinger Group, the small company he chairs, says he is cooperating with "informal investigations" into his entities' trading. It does not get much more detailed than that, unless the phrase "particular investments and trading in securities of particular issuers" counts as specificity.

The report does say, at least, that Mr. Falcone "appears to be" converting Harbinger Group, formerly a processor of fish oils named Zapata, into a "mini-version of his hedge fund." And though it's nominally headquartered in Rochester, New York, Reuters explains, it is actually housed three floors below Mr. Falcone's hedge fund. It's unclear what goes on there, or if the firm's old name was inspired by the Mexican revolutionary played by Marlon Brando in the Elia Kazan/John Steinbeck picture.

Update: Zero Hedge, the finance blog that really has become a one-stop-shop for this kind of awesomeness, has found a link between Mr. Falcone's Zapata and the John F. Kennedy assassination.

There was a striking Bloomberg item by Katherine Burton today about the billionaire hedge fund manager, who calls the former Guccione Mansion home and has the most splendiferous wife in the business. She reported that Goldman is pulling its entire $120 million from his main hedge fund, and for a very astounding reason. Mr. Falcone, who has not necessarily been having the best year, and who is harboring controversially grand plans for the next internet superhighway, apparently angered Goldman by borrowing $113 million from one of his funds to "pay personal taxes." To make matters worse, it was a fund that had suspended redemptions for everyone else.

But over at 450 Park Avenue, where Mr. Falcone's Harbinger Capital is headquartered, Mr. Falcone is having none of it.

According to a source there, the hedge fund manager believes that Goldman Sachs isn't actually upset about the $113 million withdrawal for taxes, or even his returns, but is simply still miffed that he successfully poached hedge fund star Omar Asali last year.

Mr. Asali had been the co-head of Goldman Sachs Hedge Fund Strategies, and is said to now be in charge of Harbinger's global portfolio strategy and analytics, with risk management responsibilities, too.

"We are not commenting at all on the situation. Regards," a Goldman Sachs spokesperson wrote The Observer.

On the other hand, the Journal is reporting this evening that Blackstone is "among investors" who have also submitted a withdrawal notice to Mr. Falcone. Considering Wall Street, perhaps a feud explains that, too.

But critics say Falcone doesn't have the funds for such an ambitious project. His hedge fund, Harbinger Capital Partners, controls about $9 billion across a variety of investments. Telecom analysts like Jonathan Chaplin of Credit Suisse point out that competitors like Clearwire invested $11.6 billion to create their 4G network. "It's not clear that the capital to put the model into practice is available," says Chaplin of Falcone's ambitions. 

"We've got one of the most valuable and limited resources in the United States," Falcone told Forbes of his spectrum holdings. But his competitors aren't struggling for resources. Sprint has already rolled out its 4G network. Verizon plans to have 4G in 30 cities by the end of 2010. AT&T says it will have 4G by 2011. Falcone, meanwhile, is looking to complete the first phase of his network by 2012 and complete nationwide coverage by 2015.

Falcone will have an uphill battle convincing consumers to switch from established cell phone network to his startup. Without a partner that can supply terrestrial 3G coverage, Falcone's 4G network, which runs on satellites, won't function inside most buildings. That sounds like a deal breaker, unless Falcone's going exclusively after iPhone users in NY and San Fran. Those folks don't expect phones to be able to make calls at all.

Scribd: Harbinger Plans Mar 2010

On a conference call with investors, Falcone expressed disapproval over media coverage of his $3 billion investment in LightSquared, a company that aims to provide high-speed Internet access to 260 million Americans in the next five years. (By the way, Reuters has been aggressively covering the LightSquared investment.) With roughly $9 billion under management, Falcone's fund has cast a substantial portion of its chips into the LightSquared pot. He is not happy with the way the media has characterized this outsized bet, Reuters said:

"He started off by talking about the press, saying they don't have the facts straight and that he was upset with investors for leaking info," said a person who listened on the call.

Falcone's Harbinger Capital Partners fund is down 13 percent this year, says Reuters, and another Falcone fund has dropped 18 percent. Falcone made his fortune and earned his reputation as a hotshot fund manager by betting in 2007 that the U.S. subprime housing market would implode.

Harbinger Capital has engaged in squabbles with media titans in the past, albeit in a different way. The fund at one point owned around 19 percent of The New York Times' stock as part of an effort to agitate for change in the company. Falcone got two representatives seated on the Board of Directors, but has been scaling back his investment.