This would be the single, largest violation of 5A in U.S. history (marking the dawn of USSA).
This article sums up any it’ll be reversed later.
Here are a few legal notes:
This case is brought under something called Executive Law Section 63(12). That statute gives authority to the Attorney General to enjoin someone who is engaging in “repeated fraudulent or illegal acts” or “persistent fraud or illegality.”
The judge notes — correctly — that the statute does not require three elements that are usually part of actionable fraud, namely intent, reliance, and damages. However, the judge skips over the problem that the statute does not do away with the element of “materiality.” Materiality is a critical element of a claim of fraud, and proof of it was completely missing here.
The State Comptroller at the time the statute was passed in 1956 was a guy name Arthur Levitt. Engoron quotes Levitt as saying at the time “Why not grant the Attorney General authority to enjoin anyone from continuing in a business activity if such person has been guilty of frequent fraudulent dealings?” Well, Mr. Levitt, now you know your answer. To remove the ancient common law requirements of intent and reliance from proof of fraud is to give a politicized Attorney General way too much power to attack political adversaries.
Several bankers from Trump’s lender, Deutschebank, testified that they did their own valuations of Trump’s properties instead of using the valuations provided by the borrower. That testimony completely undermines any finding of materiality.
The monetary relief is characterized as “disgorgement.” The idea is that Trump paid less interest than he would have paid if he had honestly valued the properties, and therefore he should have to give up that ill-gotten gain. But where does the “disgorgement” go? The answer is that Engoron orders the money to go to the “plaintiff,” or in other words, the AG’s office. (Does it even go to the state general fund? Good question.)