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Former Obama administration auto industry czar Steven Rattner was sued by New York’s attorney general on Thursday for allegedly paying kickbacks to win investments from the state’s $130 billion pension fund.
Rattner separately settled a related U.S. Securities and Exchange Commission civil lawsuit, agreeing to pay $6.2 million and accept a two-year ban from working with an investment adviser or broker-dealer.
The former investment banker led the federal government’s auto task force that oversaw the restructuring and bankruptcy of General Motors Co.
The lawsuit was filed by Andrew Cuomo, the New York attorney general and governor-elect, on the same day that GM began trading on the New York Stock Exchange.
Only hours before the suit was filed, Rattner had been on CNBC television talking about the revamped GM’s stock market debut.
The allegations date back to when Rattner worked at Quadrangle, the private equity firm he co-founded. Relations between the firm and Rattner have become strained, however.
Court papers showed on Thursday that he is pursuing arbitration proceedings to recover money he believes Quadrangle owes him. He also accuses his former employer of trying to “shift responsibility for its penalty” to him.
In a letter to investors obtained by Reuters, Quadrangle said it was vigorously defending itself against Rattner’s claims, and that Rattner’s conduct “continues his pattern of failing to take responsibility for his actions”.
Cuomo filed two lawsuits seeking to recover at least $26 million from Rattner and permanently bar him from the securities industry in the state.
Cuomo and the SEC alleged that Rattner entered quid pro quo arrangements with the New York State Common Retirement Fund to win $150 million in business for Quadrangle in 2005 and 2006.
The attorney general’s allegations include fraud charges under the Martin Act, a powerful state law used to combat securities fraud.
“Steve Rattner was willing to do whatever it took to get his hands on pension fund money,” Cuomo said in a statement. “Through these lawsuits, we will recover his ill-gotten gains and hold Rattner accountable.”
Rattner, 58, said he would fight Cuomo’s lawsuits, which he called “politically motivated,” and clear his name.
“This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity,” Rattner said in a statement. “I will not be bullied simply because the Attorney General’s office prefers political considerations instead of a reasoned assessment of the facts.”
Rattner is the most prominent outside executive to face charges in the “pay to play” corruption probe involving the now $132.4 billion Common Retirement Fund.
Amid concerns over radiation from scanners, civil lawsuits over pat-downs, and general ineptitude on the part of TSA airport personnel, one Florida airport has thrown in the towel.
Orlando Sanford International Airport has announced that it will opt out of the TSA’s screening program. How, you may wonder, can an airport get away with this? Suffice it to say the law is on their side.
Despite an impassioned, tearful apology and a plea for leniency, Rep. Charles B. Rangel (D-N.Y.) on Thursday became the first House member in nearly three decades to be recommended for censure.
The House ethics committee voted 9 to 1 in favor of censuring Rangel, who was found guilty this week of 11 violations of House rules, including improperly using his office to raise money and failing to pay taxes.
Thai police investigating a strong smell emanating from a Buddhist temple have found more than 2,000 fetuses hidden in the complex’s morgue that appear to have come from illegal abortion clinics.
During an initial investigation Tuesday, police discovered piles of plastic bags containing more than 300 fetuses. Police Lt. Col. Kanathud Musiganont said workers pulled more from the temple’s morgue Friday.
A Chicago woman with two artificial knees set off the metal detectors at Lambert St. Louis Airport this week. TSA agents then took her aside and groped her. The woman said they touched her “private parts.”
She told KMOV reporters, “I felt like I had been raped.” “I was shaking and crying when I left that room… (She told agents) I would prefer to use the body scanner and I was told they were not available.”
Desperate efforts to reach at least 27 coal miners missing after an explosion tore through an underground mine in New Zealand stalled Friday as fears of another blast frustrated rescue attempts.
The explosion at the coal mine on the South Island’s west coast appeared to have crippled the mine’s ventilation system but locals said they were were drawing hope from the rescue of 33 miners in Chile last month.
House Republicans unanimously decided Wednesday to join their Senate colleagues in adopting a ban on earmarks set to begin in January. The move extends a ban the House GOP initiated earlier this year.
The earmark ban was offered by Rep.-elect Sean Duffy, R-Wis., who won the election for the seat of retiring Rep. Dave Obey, D-Wis., who has been chairman of the House Appropriations Committee.
Mexican troops clashed in the northern state of Tamaulipas with gunmen believed to belong to the “Los Zetas” drug cartel, killing 11 of them, the Defense Ministry said.
The gunfight occurred Wednesday night when a patrol responded to reports of armed men in Nueva Ciudad Guerrero, the ministry said in a statement. It said the gunmen fired on the patrol, triggering the firefight.