Report: Scandal led to Rattner’s resignation

The longtime head of DLJ Merchant Banking told The New York Times yesterday that he left the firm in part as the result of an online smear campaign’s impact on both the firm and his family. The attack was launched by the ex-husband of Rattner’s former mistress.

Steve Rattner, who resigned from his position as the head of DLJ Merchant Banking last week, did so in the wake of an embarrassing personal matter made public, he has confirmed with The New York Times. Concern over the scandal’s potential impact on DLJ’s fundraising was anonymously expressed to the newspaper by sources at the firm.

Rattner had an affair with a married woman in London some five years ago which has since ended; he remains married to his wife and has worked hard to repair his marriage, according to the report.

Two months ago, Tommii Cosgrove, ex-husband of Rattner’s former mistress, began an online campaign to shame and attack Rattner, publishing a series of elaborate and inflammatory letters detailing what he alleged to be Rattner’s wrongdoings. The letters were posted to websites and emailed to Rattner’s colleagues and clients, as well as reporters.

“I had to put my life back together again. He destroyed everything I had. And I had to find him,” Cosgrove told The New York Times.

Rattner acknowledged the affair but denied other allegations lobbied by Cosgrove. “I feel like the star of a bad made-for-TV movie,” Rattner said.

The 23-year DLJ veteran acknowledged the situation had placed the firm in an awkward position, and placed stress on his family. He said that it’s “more important to spend time with my family”, which was along the lines of the official statement DLJ issued last week announcing his departure.

DLJ Merchant Banking, established in 1985, is the private equity arm of global investment bank Credit Suisse.

Founded in 1959 by William Donaldson, Dan Lufkin and Richard Jenrette, Donaldson Lufkin & Jenrette was the first investment bank to be taken public in 1970. Credit Suisse purchased the bank for approximately $11.5 billion in 2000 and continues to use the DLJ brand for its private equity operations.

Rattner joined DLJ's investment banking division in 1985 and joined the merchant banking division in 2001.