Ex-Auto Czar Cuts Deal With SEC; N.Y. Sues

Former Obama car czar Steven Rattner has agreed to pay $6.2 million to settle federal charges over his role in a "pay-to-play" scandal, but says he won't be "bullied" into accepting a harsher penalty from New York's attorney general.

The Securities and Exchange Commission announced Thursday that Rattner had accepted the fine and a two-year ban from the securities industry to resolve allegations that he paid illegal kickbacks to help his private equity firm land a lucrative investment from a state pension fund.

Similar settlement talks with state officials collapsed, however, and yesterday New York Attorney General Andrew Cuomo filed two lawsuits seeking a much tougher punishment: at least $26 million and a lifetime ban from the securities business.

Rattner expressed outrage over that demand in a statement e-mailed to reporters.

"While settling with the SEC begins the process of putting this matter behind me, I will not be bullied simply because the Attorney General's office prefers political considerations instead of a reasoned assessment of the facts," he said.

He said he did not violate the state securities law that gave Cuomo the authority to intervene in the case.

"This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity -- and I certainly did not violate the Martin Act," he said. "That's why I intend to clear my name by defending myself vigorously against this politically motivated lawsuit."

Both federal and state investigators have accused Rattner of greasing the palms of state officials and their associates in order to help his private equity firm, the Quadrangle Group, land about $150 million in pension fund investments.     

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