Trump and Kevin O‘Leary Predict Business Exodus and Negative Investment Outlook in New York Following Court Ruling
In a recent court ruling that fined former President Donald Trump over $350 million, concerns about a potential business exodus from New York State have been raised. Both Trump himself and venture capitalist Kevin O’Leary have voiced their opinions on the matter, highlighting the negative investment outlook for the state.
During a Saturday rally in Michigan, Trump expressed his plans to appeal the ruling, emphasizing that he believes the case will have far-reaching implications. He accused corrupt officials of driving businesses out of New York and claimed that he had paid over $100 million in taxes, making the situation even more unjust.
Similarly, O’Leary, known for his role on the popular show “Shark Tank,” criticized the ruling in an interview with the New York Post, describing it as “appalling,” “unjust,” and “un-American.” He warned that if the ruling is not overturned on appeal, it could lead to an exodus of businesses from the state.
In a subsequent interview on Fox News, O’Leary continued his critique, stating that there is no rationale for the ruling. He argued that New York State was already problematic for investors due to uncompetitive regulations, and this ruling makes it even worse. O’Leary went as far as saying that he would never invest in New York now and that he is not the only person with this sentiment. He pointed out that foreign institutions, private equity firms, and pension funds would likely shy away from investing in New York as well.
O’Leary drew comparisons between New York and states like Tennessee, which he referred to as a “winner state” with good policies and competitive taxes. He urged people to consider the context of winners and losers when evaluating investment opportunities. Ultimately, he concluded that New York is a “mega loser state.”
Trump took to social media to praise O’Leary for his criticism of the ruling, predicting an exodus of businesses from New York as a result. He thanked O’Leary for speaking out and agreed with his assessment.
The case against Trump was brought by New York Attorney General Letitia James, who accused him and the Trump Organization of defrauding banks, insurers, and others by inflating asset values and exaggerating net worth in order to secure loans. Trump argued that no bank was victimized and that lenders, including Deutsche Bank, made substantial profits from the loans.
During the trial, a Deutsche Bank executive testified that it is not unusual for a bank to adjust a client’s stated asset value, even by half, and still approve a loan. The executive also stated that differences between a client and the bank about asset values are a matter of opinion and not a disqualifying factor.
However, Justice Engoron, in his 92-page legal opinion, rejected the defense’s arguments and repeatedly repudiated the testimony of expert witnesses called by the defense. He concluded that defendants had submitted false financial data to accountants, resulting in fraudulent financial statements. He criticized defendants for denying reality and failing to take responsibility or implement internal controls to prevent future recurrences.
In terms of penalties, Justice Engoron granted most of what Attorney General James requested. Trump and Trump Organization executives were ordered to pay $355 million in damages. The former president has been barred from doing business in New York State for three years, but he was not permanently banned from conducting business in his native state.
Donald Trump Jr. and Eric Trump, Trump’s sons, were also fined $4 million each.
The court ruling and the ensuing remarks by Trump and O’Leary have raised concerns about the investment outlook in New York State. The potential for a business exodus and negative perceptions of the state’s regulations and competitiveness could impact its economic growth and attractiveness to investors. Only time will tell if these concerns come to fruition or if efforts will be made to address them and restore confidence in New York’s business environment.
