The New York State Attorney has posted its two lawsuits against former Quadrangle founder and car czar Steven Rattner:
From the statement:
NEW YORK, NY (November 18, 2010) – Attorney General Andrew M. Cuomo today filed two lawsuits against Steven L. Rattner, former founding principal of private equity firm Quadrangle Group, LLC (“Quadrangle”), in the New York State Supreme Court, New York County, alleging he paid kickbacks in order to obtain $150 million in investments in Quadrangle from the New York State Common Retirement Fund (“CRF”).
The two lawsuits seek at least $26 million from Rattner and his immediate lifetime ban from the securities industry in New York.
In the first action, Cuomo added Rattner as a defendant to a forfeiture action pending in New York State Supreme Court, New York County, against Henry “Hank” Morris and David Loglisci, and seeks to recover $13 million obtained by Rattner, and millions in future fees and profits.
In the second action, Cuomo filed a lawsuit against Rattner under the Martin Act and the Executive Law, including the Tweed Law, in New York State Supreme Court, New York County, seeking over $13 million in civil recoveries, millions in future fees and profits, as well as additional remedies including injunctive relief.
In a third action, as part of the Martin Act lawsuit, Cuomo filed an application to permanently ban Rattner from engaging in the securities business in the State of New York. The application for an immediate securities ban is based on the fact that Rattner engaged in fraud and refused to answer 68 questions based on his fifth amendment privilege.
In English: Andrew Cuomo, the NY State attorney general, is alleging is that Rattner defrauded the New York State pension scheme by arranging for political officials to receive kickbacks and other favours in exchange for their directing investments toward his fund, Quadrangle.
Separate but related, the Wall Street Journal is reporting that Rattner has settled a lawsuit by the SEC, in which he agreed to a 2-year ban from the securities industry (Cuomo is seeking a lifetime ban for Rattner):
Mr. Rattner agreed to pay $6.2 million and to a two-year ban from associating with any investment advisor or broker-dealer to settle the SEC allegations, the SEC said Thursday. …
“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,” Mr. Rattner said in a statement. “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. That’s why I intend to clear my name by defending myself vigorously against this politically-motivated lawsuit.”
Sounds like one settlement is about all Rattner will acquiesce to.
As Dan Primack notes in his excellent overview of the case, the lawsuits and the settlement come at a time when Rattner has been making the media rounds for his recently launched book and, today, the GM IPO — whose relative success is something he’d like to be given credit for.
Writes Primack, aptly: “It seems that Andrew Cuomo has a wonderful sense of theater.”
Related link:
About time: Cuomo finally sues Rattner – Street Sweep