The charges filed Wednesday include allegations against hedge-fund manager Philip Falcone, his Harbinger Capital Partners fund, and Harbinger's former chief operating officer, Peter Jenson. They include misappropriation of funds, market manipulation and preferential treatment for favored investors who were allowed to withdraw funds.

The SEC used strong language to condemn Falcone, Harbinger and Jenson.

"Today's charges read like a final exam in a graduate school course in how to operate a hedge fund unlawfully," Robert Khuzami, director of the Division of Enforcement, said in a press release.

LightSquared received conditional approval from the U.S. Federal Communications Commission last January to operate a land-based LTE network using frequencies close to the GPS band. It planned to sell service on that network, as well as on its satellites, on a wholesale basis to other carriers. But in February, the FCC said it would because of interference between the LTE network and GPS receivers.

LightSquared has since , while continuing to say it is seeking a way to build its network. The company has said the federal government should swap another piece of spectrum for the band that it won't let LightSquared use. The value of LightSquared, which makes up a large percentage of Harbinger's assets, reportedly has plummeted as its plan faced growing opposition from regulators and the GPS industry.