Eric T. Schneiderman, the New York attorney general, said on Tuesday

Eric T. Schneiderman, the New York attorney general, said on Tuesday
that his office had reached a $40 million settlement with Harbert Management Corporation and several of its top executives over allegations that they had not paid state taxes for some of the most profitable years that Mr. Falcone was managing Harbinger, which was owned by Harbert.
“There is a lot of potential liability here for the industry with multistate operations.”
The settlement said that Harbert and its executives did not pay any taxes on “hundreds of millions of dollars of performance fees generated by Harbinger” and
that by only paying taxes in Alabama, which has a lower tax rate than New York, the investment firm and its executives saved themselves money.
The filing said Mr. Falcone, as a New York resident, “paid lower New York State taxes as a result of a credit for tax these members paid to Alabama.”
A spokesman for Mr. Falcone did not respond to a request for comment.
Harbert Reaches $40 Million Tax Settlement With New York -
By MATTHEW GOLDSTEINAPRIL 18, 2017
The money manager Philip A. Falcone, who made billions of dollars betting on the collapse of the housing market a decade ago
and later lost at least a billion dollars investing in wireless telecommunications, is no stranger to run-ins with regulators.
The settlement with Mr. Schneiderman’s office said Mr. Falcone indirectly benefited from Harbert’s
decision to have its “offshore manager,” or Harbert, pay all of its state taxes in Alabama.