ghost-like halo on raw video

Hello all,
I generally know my way around FCP7 but need help with a post edit. I recorded a live show of mine at a club using a Sony HVR V1U sending the video via HDMI straight to an AJA KiPro. The video turned out great, however even with the camera settings set to default, the camera captured a strange fuzz around illuminated objects, and blasted out facial details. I'm curious what caused this as I may be using this set up again in the future. But for now my concern is trying to get this balanced out. I tried the 3 way color corrector, but by taking down the blacks, the halo is reduced but I lose background musicians that weren't as well lit. This seems to be a bit of a tough edit because lights are constantly changing colors, spot lights on/off, etc. Is there any explanation for the origin of this error and how it can be avoided again, and is there a tool on FCP to fix or help better it? See screenshot.
Thanks all.