Under a deal with the Securities and Exchange Commission that could be announced as early as Thursday, Mr. Rattner will pay a fine of more than $5 million along with accepting the ban, according to the people briefed on the talks. Mr. Rattner may still be able to perform some roles in finance, even with that ban.Rattner's involvement in the auto industry was curious given that he had no experience in the auto industry and that he was already under investigation by NYS Attorney General Andrew Cuomo for the pension problems (which ultimately resulted in arrests and convictions for controller Alan Hevesi, Hank Morris, and several others).
A spokesman for Mr. Rattner declined to comment.
Mr. Rattner, 58, while at the private equity firm he co-founded, the Quadrangle Group, was accused by federal regulators of paying off a political adviser to secure investment business from the state’s pension fund.
He is the most prominent financier to pay a settlement in the pension kickback investigation, which raised questions across the country about the ways investment firms seek money from public pension funds. Private equity executives like Mr. Rattner often hire outside advisers called placement agents to help them pitch their services to public pension officials, a practice that has come to be called pay to play. New York State, and the city, have since banned their pensions from working with placement advisers, though the practice continues in many parts of the country.
The investigation led all the way to the top of New York’s $125 billion fund. Alan G. Hevesi, the state’s former comptroller, pleaded guilty last week to a felony for steering pension fund investments to a money manager who had contributed to his campaign and steered business to one of Mr. Hevesi’s friends. The state’s former chief investment officer also pleaded guilty to securities fraud in March for his role.
The investigation in New York was led by the S.E.C. and the office of the New York attorney general, Andrew M. Cuomo, the Democratic candidate for governor. Mr. Cuomo’s office was still negotiating with Mr. Rattner on Wednesday night, said the people close to the case.
Rattner resigned in July 2009 over the widening scandal. Cuomo has been working for more than a year on wrangling a deal from Rattner.