Ex-Car Czar Said to Settle With SEC in Pension Case
Steven Rattner, the former car czar, has agreed to a settlement with the Securities and Exchange Commission over kickback claims involving the New York State pension fund, a person with knowledge of the negotiation said Wednesday.
Mr. Rattner will accept a multiyear ban from the securities industry and pay a fine of more than $5 million, the person said. He is still in negotiations over a similar settlement with the office of the New York attorney general, Andrew M. Cuomo.
The settlement, which is expected to be announced on Thursday, caps off a multiyear investigation by the government into kickbacks paid to officials with New York’s pension fund. Earlier this month, Alan G. Hevesi, the state’s former comptroller, pleaded guilty to a corruption charge involving the state fund.
Mr. Rattner refused a similar offer to settle with the SEC last spring, because he did not want to accept the ban from the industry. Since then, the firm has been cooperating in the government’s investigation of Mr. Rattner.
Since leaving his post with the Obama administration’s auto task force over a year ago, Mr. Rattner has been advising Mayor Michael R. Bloomberg of New York on his personal finances and writing a book about his tenure as car czar. That book, “Overhaul” was released last month.
A spokesman for the SEC declined to comment.
The Quadrangle Group, the private equity firm co-founded by Mr. Rattner, settled with the SEC and Mr. Cuomo’s office in the spring and disavowed Mr. Rattner’s conduct in a statement.
The accusations against Mr. Rattner settle on his agreement to help finance a low-budget film called “Chooch” that was being produced by David J. Loglisci, the chief investment officer of the state’s pension. Mr. Loglisci pleaded guilty to securities fraud in March. One of Quadrangle’s private equity funds owned a company called GT Brands that distributed movies, and Mr. Rattner used that company to fund that deal.
Mr. Rattner and his wife are prominent donors to the Democratic party. Mr. Rattner was an investment banker at Lazard before he co-founded Quadrangle in 2000. Early in his career, Mr. Rattner worked as a reporter for The New York Times.