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UPDATE 1-SEC moves to bar Rattner from securities work-report
June 2, 2010 / 12:53 PM / 7 years ago

UPDATE 1-SEC moves to bar Rattner from securities work-report

* Rattner has “fiercely resisted” proposed penalty-NYT (Adds SEC and Rattner decline to comment)

NEW YORK, June 2 (Reuters) - The U.S. Securities and Exchange Commission is moving to bar high-profile investor Steven Rattner from working in the securities industry for up to three years, the New York Times reported on Wednesday.

Rattner, who founded private equity firm Quadrangle Group LLC but left in 2009, is being investigated for his role in a suspected kickback scheme, and has resisted the proposed penalty from the SEC, the Times said, citing three people told of the discussions.

Representatives for Rattner and the SEC declined to comment on the story.

New York Attorney General Andrew Cuomo in April said that Quadrangle and four other defendants agreed to pay nearly $12 million to settle over their involvement in the New York State Common Retirement Fund, the third-largest U.S. public pension fund. [ID:nN15228127]

Investigators alleged that Quadrangle won a $100 million investment from the pension fund by engaging in improper “quid pro quo” arrangements.

The SEC and Cuomo have suggested that Rattner improperly paid off a political operative to win lucrative business from the New York state pension fund, the paper said, including an incident where he arranged to help distribute a low-budget film for the brother of a pension fund official.

The paper said Rattner was left out of the Quadrangle agreement because he declined the SEC’s proposal that he be barred from working on Wall Street. Rattner left the firm in 2009 to briefly run U.S. President Barack Obama’s auto bailout task force.

Under the proposed SEC settlement, Rattner would most likely be barred from advising New York Mayor Michael Bloomberg, the Times said. Rattner is playing a role in creating an investment office for Bloomberg, which will oversee billions of dollars for the mayor’s new philanthropic foundation. (Reporting by Franklin Paul, editing by Maureen Bavdek)

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