Rauner says he didn't cause problems at troubled brokerage firm

Written By Maudlyne Ihejirika Posted: 08/08/2014, 08:08pm

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Republican gubernatorial candidate Bruce Rauner, showing off a new South Side campaign office Friday, spent most of his time answering questions about federal fraud indictments against the former CEO and another ex-employee of a global brokerage firm tied to him, that cost clients millions of dollars.

“When the wrongdoing of those particular employees came up, they were immediately fired,” said Rauner, repeating a refrain since the indictments of the onetime head of Bermuda-based ConvergEx Global Markets Limited and an associate in federal court in New Jersey on Thursday on charges they stole millions of dollars in a sophisticated trading fraud.


Anthony Blumberg, 49, of New Jersey, and Craig Marshall, 47, of Bermuda, worked for the subsidiary of a firm owned by GTCR, Rauner’s former private equity company he headed up until October 2012.

Blumberg and Marshall were indicted late Wednesday on criminal charges of securities fraud, wire fraud and conspiracy to commit securities and wire fraud.  Blumberg — the CEO of ConvergEx Global Markets Limited — also faces a separate civil lawsuit filed by the Securities and Exchange Commission.

According to the indictment, both Blumberg and Marshall — a trader — routed trades through Bermuda between 2007 and 2011 to fraudulently charge clients fees, which they then hid.

“The company cooperated with the investigation, and based on the accusations, it’s great that those folks are being prosecuted and they should serve jail time,” said Rauner, adding he doesn’t believe any responsibility for alleged fraud lies at his door.

“You know what? Behavior inside large organizations unfortunately is not always perfect, and nobody can control every element and every behavior,” said Rauner at his digs at 212 E. 79th St., seeking to woo voters in the mostly African-American neighborhood. “As soon as that behavior came to light, the board of directors of ConvergEx — I was never on that board, I wasn’t directly involved with the company — but from everything I understand the board immediately took action, fired those employees, helped with the investigation, and it’s great that their behavior was prosecuted.”

Gov. Pat Quinn hit Rauner for the “very troubling” federal fraud indictments and demanded an explanation.

“I think they’re very troubling,” Quinn told reporters Friday in Springfield.“My opponent talks about bringing in desuperstars, business superstars, to run government in Illinois. Well, this is an example of one of the superstars his company, GTCRauner, brought this person in who’s now under indictment for fraud. We’ve got to get some answers here.”

The governor added,“If you parade around Illinois and say you’re going to run Illinois like a business, … take a look at how he has run his businesses in private life . . .”

Rauner joined GTCR in 1981 and was its chairman until stepping down in October 2012.

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