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Thursday should have been a good day for Steven Rattner '74 P'10 P'13.

But on the day that General Motors' initial public offering dramatically reduced the government's stake in the company he helped to restructure, the former "car czar" faced a $26 million fine and a lifetime ban from the New York securities industry for his alleged involvement in a pay-to-play scandal, multiple news sources reported Thursday.

New York Attorney General Andrew Cuomo filed two lawsuits against Rattner, accusing him of trading kickbacks to New York public pension fund leadership for a $150 million investment in Quadrangle Group LLC, the private equity firm that he founded. Rattner, a fellow on Brown's Corporation and a former Herald editor-in-chief, left Quadrangle in February 2009 to head the president's auto industry task force.

In a separate matter Thursday, Rattner agreed to a $6.2 million settlement on earlier pay-to-play charges levelled by the Securities and Exchange Commission. The deal bans Rattner for two years from investment advising and securities trading.

Both Cuomo, also New York's governor-elect, and the SEC accused Rattner of employing favors — including agreeing to distribute a movie produced by the pension fund's chief investment officer, donating to the campaign of former New York Comptroller Alan Hevesi and hiring a fundraiser associated with Hevesi — to gain the fund's business.

Responding to Cuomo's charges on CNBC's Squawk Box on Thursday, Rattner called the corruption investigation "the most painful episode I've ever been through in my professional life."

"I have indicated that I am open to a reasonable settlement in order to move on with my life," he said.

Cuomo's insistence on excluding Rattner from the state's securities industry stemmed from Rattner's repeated refusal to answer prosecutors' questions during a Sept. 16 deposition, according to the Wall Street Journal. Rattner invoked his Fifth Amendment rights 68 times during the testimony, the Journal reported.

While Rattner's case is still ongoing, Quadrangle reached a $7 million settlement in April on charges that it gained millions of dollars in investments from New York's Common Retirement Fund through illegal fees.



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