Rattner Wins SEC Approval for Dealmaking Role With Guggenheim

Steven Rattner Interview In New York

Steven Rattner.

Photographer: Jonathan Fickies/Bloomberg
  • Rattner may advise media clients, regulator says in order
  • Application calls for regular meetings with compliance staff

Steven Rattner, the money manager and former leader of the U.S. bailout of the auto industry, won regulators’ approval to work on deals for the investment-banking unit at Guggenheim Partners.

Rattner would be paid by Guggenheim based on fee income that the firm earns on his deals, according to an order dated Monday from the U.S. Securities and Exchange Commission approving a potential role. His work could include advising clients in the media industry, the document shows. The ruling opens a path for him to bring transactions to Guggenheim without being a full-time employee, according to two people familiar with the arrangement who asked not to be identified discussing a private deal.

The former head of Quadrangle Group, Rattner has faced limits on his financial activities after the 2010 resolution of an SEC probe into kickbacks in connection with a New York state pension fund. Guggenheim stated that he would have to meet regularly with compliance staff and face restrictions in a new role, according to an SEC summary of the firm’s application.

“Rattner will not, directly or indirectly, solicit, receive, or manage investments from any public pension funds, and will not appear in any capacity before any public pension fund,” according to the SEC document. “Rattner will not maintain, or be the registered representative for, any customer accounts, and will not have contact with any retail customers.” Guggenheim also owns an asset-management business.

Rattner is chairman of Willett Advisors, which invests the personal assets and a family foundation tied to Michael Bloomberg, the majority owner of Bloomberg News parent Bloomberg LP. Under the SEC order, Rattner is prohibited from providing advice to Bloomberg LP.

‘Fully Committed’

“Should he choose in the future, this enables Steve to engage in investment-banking activities,” a spokesman for Rattner said of the SEC’s order in an e-mail. “He anticipates remaining fully committed to his position as chairman of Willett Advisors.”

Rattner, a former Wall Street dealmaker, agreed in 2010 to pay $6.2 million to settle the SEC probe without admitting any wrongdoing. Rattner and Quadrangle won $150 million of investments in 2005 and 2006 after he arranged for a firm affiliate to distribute the DVD of a low-budget film co-produced by the chief investment officer of the New York State Common Retirement Fund, according to the SEC complaint. The investment earned Rattner $3 million in fees over five years, the SEC alleged.

Guggenheim said that Richard Osler, a senior managing director of the investment banking department, was designated to be Rattner’s primary supervisor, according to the SEC document. A spokesman for Guggenheim declined to comment, as did Judy Burns of the SEC.

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