IT’S NOT JUST LIGHTSQUARED: Regulators could sanction Falcone over trading.

Philip Falcone, a hedge fund manager who became an overnight billionaire by betting on the collapse on the U.S. housing market, is now fighting to keep his career afloat.

The investor, who has since bet much of his Harbinger Capital Partners money on a cash-strapped wireless telecom company, said on Thursday that U.S. securities regulators are considering filing civil fraud charges against him and what is left of his once $26 billion hedge fund empire. . . . Harbinger now manages less than $4 billion and roughly half of the money is tied up in its investment in LightSquared LP, the upstart wireless telecom on which Falcone has bet the ranch. LightSquared is running low on cash and its outstanding debt trades at a steep discount as its fortunes have floundered due to a number of technical issues.

Recently the company’s technology was said to interfere with the global positioning system, the widely used technology involved in everything from navigation to managing irrigation. Some lawmakers have accused the Federal Communications Commission of fast-tracking LightSquared’s project, although the agency says its process has been engineering-based.

“Now the FCC is faced with the real possibility that it made a multibillion-dollar grant of valuable spectrum to someone who could be charged with violating securities laws,” said Iowa Senator Chuck Grassley. “The FCC chairman should lead the effort to provide documents and offer insight into how the agency decided to give Mr. Falcone, Harbinger Capital and LightSquared this multibillion-dollar grant.”

Indeed.