Friday, April 16, 2010

Private Equity Firm Quadrangle, Founded By Former Car Czar, Pays $12 Million To Settle Kickback Scheme Allegations

Quadrangle Group LLC, founded by former Obama Administration"car czar" Steve Rattner, has agreed to pay $12 million to settle allegations it had engaged in a "widespread kickback scheme" involving a "pay-to-play" scheme with former New York state officials and its pension dating back to 2005. Essentially, the SEC alleged that an unnamed Quadrangle executive arranged in 2005 for an affiliate of the firm to distribute a DVD of a low-budget film called "Cooch" that former New York State Deputy Comptroller David Loglisci and his brothers had produced. In return, Quadrangle received a $100 million investment from the New York State Common Retirement Fund, according to the SEC. Quadrangle also allegedly paid a sham $1 million "finder's fee" to Henry Morris, a top adviser to then New York Comptroller Alan Hevesi, for arranging the deal with the pension fund.

Read the story here and here.

Read the SEC complaint here and the final consent judgment here.

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