Cuomo Seeks $26M from Rattner in NY Pay-to-Play Scandal

November 18, 2010 ( – New York state Attorney General Andrew Cuomo filed two suits against the former founder of the private equity group Quadrangle Group in connection with pay-to-play charges centered on the New York State Common Retirement Fund (CRF). 

A Cuomo news release said the New York state Superior Court suits seek $26 million in penalties and a lifetime securities ban against Steven L. Rattner in connection with allegations he paid kickbacks to win $150 million in investments from the CRF (see Report: Auto Czar’s Investment Firm Focus of Pay-to-Play Probe). 

According to the announcement, the first legal action involved adding Rattner as a defendant to an existing forfeiture action against Henry “Hank” Morris and David Loglisci, seeking to recover $13 million obtained by Rattner and millions in future fees and profits.  

In a second action, Cuomo sued Rattner under the Martin Act and Executive Law, including the Tweed Law, in New York state Supreme Court, seeking more than $13 million in civil recoveries, and millions in future fees and profits. As part of the Martin Act suit, Cuomo is seeking to permanently bar Rattner from the securities business in New York because Cuomo said Rattner had engaged in fraud and had declined to answer 68 questions based on his Fifth Amendment privilege.

“Steve Rattner was willing to do whatever it took to get his hands on pension fund money including paying kickbacks, orchestrating a movie deal, and funneling campaign contributions,” said Cuomo, in the announcement. “Through these lawsuits, we will recover his ill gotten gains and hold Rattner accountable.”

Also on Thursday, the U.S. Securities and Exchange Commission (SEC) announced a related civil settlement with Rattner over the same pay-to-play allegations focusing on his CRF dealings. Rattner agreed to settle the SEC’s charges by paying $6.2 million and agreeing to a bar from associating with any investment adviser or broker-dealer for at least two years.

“New York State retirees deserve investment advisers that are selected through a transparent, conflict-free process, not through payoffs, undisclosed financial arrangements and movie distribution deals,” said Robert Khuzami, Director of the SEC’s Division of Enforcement, in an SEC announcement.

More information about the Cuomo suits is at More information about the SEC action is at