Recently, the New York Court of Appeals ruled that the attorney general could get millions from former AIG CEO Maurice Greenberg through a process called disgorgement. Disgorgement requires defendants to return money made through unlawful gains. In Greenber’s case, that could amount to over $25 million made by misleading shareholders between 2000 and 2005.
It might also have an impact on an upcoming case in which New York is going after Donald Trump because Trump University was reportedly a fraudulent mess. The “institution” was unlicensed and illegal, and the attorney general is going after $5 million that Trump reportedly earned from students. A class action lawsuit in New York, as well as two in California, have since been pressed against Trump.
The disgorgement ruling is important because, until recently, New York didn’t have that as an option for going after defendants found guilty of fraudulent action. Now they do. Trump will likely argue that most of the money was earned outside of New York, which would limit how much can be taken through disgorgement. But class action lawsuits in other states could add to the amount Trump will have to pay if found guilty. The trials aren’t until November, so there’s time for both sides to try and shore up their arguments.
Trump, however, is not off to a great start. He has already claimed that the suits are baseless and politically motivated, both of which are pretty slim arguments. To make matters worse, he has accused the California judge who is in charge of these cases of going after him because he’s white. The judge in question is of Mexican heritage, being born in Indiana to Mexican immigrants.