Ex-auto Czar Cuts Deal with SEC; N.Y. Sues

Friday, 19 Nov 2010 09:06 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
NEW YORK -- Former Obama car czar Steven Rattner has agreed to pay $6.2 million to settle federal charges over his role in a "pay-to-play" scandal, but says he won't be "bullied" into accepting a harsher penalty from New York's attorney general.

The Securities and Exchange Commission announced Thursday that Rattner had accepted the fine and a two-year ban from the securities industry to resolve allegations that he paid illegal kickbacks to help his private equity firm land a lucrative investment from a state pension fund.

Similar settlement talks with state officials collapsed, however, and yesterday New York Attorney General Andrew Cuomo filed two lawsuits seeking a much tougher punishment: at least $26 million and a lifetime ban from the securities business.

Rattner expressed outrage over that demand in a statement e-mailed to reporters.

"While settling with the SEC begins the process of putting this matter behind me, I will not be bullied simply because the Attorney General's office prefers political considerations instead of a reasoned assessment of the facts," he said.

He said he did not violate the state securities law that gave Cuomo the authority to intervene in the case.

"This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity -- and I certainly did not violate the Martin Act," he said. "That's why I intend to clear my name by defending myself vigorously against this politically motivated lawsuit."

Both federal and state investigators have accused Rattner of greasing the palms of state officials and their associates in order to help his private equity firm, the Quadrangle Group, land about $150 million in pension fund investments.

In its complaint, the SEC said Rattner arranged for a film distribution company owned by Quadrangle to distribute a low-budget movie produced by the pension fund's chief investment officer and his brothers.

He hired the top political consultant to then-state Comptroller Alan Hevesi as a "placement agent" on the investment deal. The SEC said the arrangement resulted in the consultant, Henry Morris, being paid more than $1 million in "sham fees."

Rattner arranged to have an associate make $50,000 in contributions to Hevesi's re-election campaign, according to the SEC.

Hevesi has pleaded guilty to criminal charges in connection with the case, and a number of securities executives and firms, including Quadrangle, have paid many millions of dollars in penalties.

Rattner, a major political fundraiser for Democrats and influential policy figure, left the firm last year to become co-leader of the White House task force that restructured General Motors and Chrysler. He left the government in July and has been promoting his new book on the auto industry since.

The money Rattner is paying to settle the charges represents a fraction of his wealth. He reported net worth last year of between $188 million and $608 million. But banning him from the industry, even a temporarily, could greatly limit his earning potential.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Man in Dallas With Ebola Initially Sent Home With Antibiotics

Wednesday, 01 Oct 2014 08:27 AM

A man with Ebola in Dallas was initially sent home from the hospital with antibiotics after seeking treatment for an unk . . .

Derek Jeter Launches site to Connect Athletes to Fans

Wednesday, 01 Oct 2014 08:18 AM

Derek Jeter was one of the world's most covered athletes in media during his 20-season career with the New York Yankees. . . .

Glaxo's Ebola Vaccine, Rejected by WHO, Now Best Hope Amid Outbreak

Wednesday, 01 Oct 2014 07:28 AM

The calls started coming in August to the office of GlaxoSmithKline Plc Chief Executive Officer Andrew Witty from the he . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved