Rattner Blasts Quadrangle, Cuomo

Nov 24 2010 | 6:05am ET

It's been a rough week for Steven Rattner. Settling a Securities and Exchange Commission lawsuit of his former firm's involvement in the New York pension pay-to-play scandal cost him more than $6 million, and wasn't enough to get New York's attorney general (and soon-to-be governor) off of his back. His old firm, Quadrangle Group, which all but disowned him earlier this year when it settled with the SEC itself, is changing everything about itself to distance it from him.

So perhaps Rattner can be forgiven for being a little testy and, yes, lashing out some.

Last week, Rattner disclosed in a court filing that he has filed an arbitration claim against Quadrangle, accusing the soon-to-be-renamed firm of "seizing" money owed to him and for "unlawful conduct and contractual breaches."

"Faced with the investigation, the Quadrangle parties had a choice: they could have either disclosed completely their involvement with the underlying facts, or the could offer the New York attorney general a scalp," Rattner said in the filing. "They chose the latter."

It is unclear how much Rattner is seeking from his old colleagues. He left this firm last year to lead President Barack Obama's auto industry task force.

The filing last week sought documents related to the pay-to-play investigation at the New York State Common Retirement Fund.

Quadrangle, which at the time of its settlement blasted Rattner, calling his conduct "inappropriate, wrong and unethical," said it would defend itself "vigorously" against his claims.

"Unfortunately, his further filing today is filled with inaccuracies and misrepresentations, which continues his pattern of failing to take responsibility for his actions," Quadrangle wrote in a letter to investors.

Rattner did not stop with his former firm, however. Appearing on Charlie Rose this week, he took aim at Andrew Cuomo, the outgoing New York attorney general.

"I have already settled in exactly the same fashion that every one of these dozen other firms have settled in," Rattner said. "And so everything else is just, frankly, close to extortion."

Of Cuomo, Rattner said "he has basically threatened me all along the way that if I don't do what he wants me to do, he will prosecute me to the ends of the earth."

He also made his feelings known about his former friends at Quadrangle.

"I could not believe that they would throw me overboard," he said. "I was stunned by it. I was shocked beyond belief."


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