Attorney General Eric Schneiderman is currently pursuing civil fraud charges against Trump over defunct Trump University, which allegedly ripped-off thousands of students.
Schneiderman said he was “deeply troubled” by the new administration’s latest efforts to unleash Wall Street wolves by gutting state consumer protections known as “blue sky” laws.
The attorney general’s office has traditionally policed Wall Street because of the concentration of financial institutions in the state.
“The Presidential Transition Team is considering ways to eviscerate some of the most basic consumer and investor protection laws in the country, he said in a statement released today.
“Every day, state and local law enforcement effectively utilize Blue Sky laws to root out the worst types of fraud, corruption, and abuse on Wall Street and across major industries.
“In many cases, these anti-fraud statues are consumers’ and investors’ first line of defense against exploitation, particularly when retail and institutional investor dollars are in the hands of increasingly complex and opaque financial institutions,” he added.
Schneiderman said multi-state investigations by state attorneys general into the 2008 housing market collapse recovered more than $95 billion in fines, penalties and consumer restitution.
He called state anti-fraud statutes “among the most effective deterrents of misconduct.”
“Any attempt to gut these consumer and investor protections would severely undercut state police powers and only embolden those who seek to defraud and exploit everyday Americans,” Schneiderman warned.
“Blue sky” laws “have helped state and local law enforcement keep consumers and investors safe for over one hundred years,” he added.
The move by the Trump transition team contradicts Trump’s frequent campaign pledge to return powers to the state.
But since winning the election, Trump has increasingly embraced what he called Clinton’s “corrupt” big money Wall Street pals.
He appointed Paul Atkins, a former Securities an Exchange Commission (SEC) member and consummate Washington insider, to oversee the Wall Street regulatory agency.
Atkins currently heads his own consulting firm, Patomak Global Partners LLC. It specializes in advising Wall Street firms on financial compliance issues like those that come before the SEC.
The firm is a classic example of revolving-door government, which Trump also railed against in the campaign.
Atkins, 58, is known as a ceaseless advocate of financial deregulation and opposes stiff fines for Wall Street wrong-doing.