Rattner Accused of Kickback Scheme

By Robert Davis
Nov 19 2010

Steven Rattner, the man who oversaw the bailout of the US automobile industry, has been sued by New York officials today as part of an alleged pension kickback scheme.

New York Attorney General Andrew Cuomo announced today that he has filed a civil suit against Steven Rattner, alleging that he took part in a massive scheme to receive kickbacks while working to invest New York worker pensions.

This latest set of allegations comes as Rattner was celebrated by Wall Street for his work in bailing out the auto industry and the massive IPO by GM that has ended the losses for the US government in the auto industry.

Cuomo is looking for the SEC to permanently ban Rattner from taking part in securities exchanges in New York and elsewhere. This is a bold move by Cuomo and one that will be difficult to prove as the fight could be a long and drawn out battle.

However, Rattner has already settled part of the case brought by the SEC against his financial firm, part of the alleged kickback scheme. Under the terms of the deal he will be suspended from securities business in New York for two years and also pay a fine of $6.2 million.

Cuomo is hoping that the SEC will take things one step further. He has said that the punishment that was imposed is not steep enough and it will allow Rattner to continue with his criminal activities once the suspension has been lifted.

Rattner has refused to comment on the new suit.