Rattner settles New York pension probe

Former Quadrangle chief Steve Rattner has agreed to pay $10m and be banned from appearing before New York public pensions for five years.

Former Quadrangle Group chief Steve Rattner has agreed to pay $10 million to settle his role in former New York Attorney General Andrew Cuomo’s wide-ranging pension pay-to-play investigation.

Rattner will also be banned from appearing “in any capacity” before public pension funds in New York state for five years. The agreement ends two lawsuits brought against Rattner for allegedly paying kickbacks to obtain $150 million in commitments to Quadrangle from the New York State Common Retirement Fund. The settlement is “the last major action” of the multi-year investigation, Cuomo said in a statement.

The Rattner settlement caps Cuomo's career as New York State's top prosecutor, as he was sworn in as governor of the state on 1 January.

Including the agreement with Rattner, Cuomo has collected more than $170 million from 19 private equity firms and five individuals who have settled their cases. The investigation has led to eight guilty pleas, including New York Comptroller Alan Hevesi, his chief political advisor Henry Morris and former pension chief investment officer David Loglisci.

Rattner settled with the SEC in November 2010, agreeing to pay $6.2 million and take a two-year ban from “associating with any investment adviser or broker-dealer”, the SEC said in a statement.

Last June, New York’s Mayor Michael Bloomberg defended Rattner, telling a reporter, “I don’t think he did anything wrong”.

Rattner left Quadrangle in 2009 to take up a high-profile post with the administration of US President Barack Obama, heading up a team restructuring the US auto industry. He served on the post for about six months, before stepping down amid reports that he was somehow involved in pay-to-play situations.

Rattner works as an advisor at Willett Advisors, a firm he helped launch using $5 billion of capital from Bloomberg, Rattner's spokesperson told PEO in a prior interview.