Sen. quits dodgy firm gig
Comptroller hopeful bolting before subprime deal done
State Sen. Brian Benjamin will step down from the board of a controversial company after withering criticisms for his role there and how it might have impacted him if elected as city comptroller.
Benjamin made the move public after the Daily News contacted him Tuesday about that company’s plans to acquire two other companies in the coming months.
As a member of the board of directors for NextPoint Acquisition Corp., Benjamin was earning up to $50,000 a year from the company and had acquired up to $250,000 in company stock.
“As part of a long-planned board reorganization set for March 15, Brian will be stepping down from NextPoint well in advance of the acquisition of these companies,” said Benjamin’s spokeswoman Marissa Coscia. “Brian believes that once he is elected comptroller it will be critical to discontinue outside professional investment activities,” she said.
NextPoint announced last week that it will be adding two companies to its portfolio: LoanMe, a subprime consumer lending company that’s come under fire for issuing loans with exorbitant interest rates; and Liberty Tax, one of the country’s largest tax preparation services, which entered into a settlement with the feds in 2019 over allegations it failed to safeguard against filing fraudulent tax returns.
Benjamin is running for city comptroller against City Councilman Brad Lander, fellow state Sen. Kevin Parker, Assemblyman David Weprin — and possibly Council Speaker Corey Johnson, who’s said he’s mulling a run for the job.
The comptroller helps oversee the city’s investment portfolio and provides oversight of the city’s finances.
Benjamin’s connection to NextPoint raised hackles about how he might handle that role because one of its leaders, Andrew Neuberger, oversaw subprime loans during his time at Morgan
Stanley, whose lending helped pave the way for the 2008 financial crisis.
On Tuesday, NextPoint’s plans to acquire LoanMe and Liberty Tax — a deal that’s expected to close within the next four months — once again raised questions about Benjamin’s involvement with the company.
“It’s hugely problematic for someone who wants to manage billions and billions of dollars in city pension money,” said Jonathan Westin, an affordable housing advocate and executive director of New York Communities for Change.
To Westin, Benjamin’s drawing a salary from a company connected to subprime loans was troubling on its own.
The company is a special-purpose acquisition company, with the primary goal of raising money through taking companies public and then using those earnings to purchase other companies.
According to an August prospectus, NextPoint appears to be focused on the subprime lending market, as Neuberger had during his time at Morgan Stanley.
“In our view, the consumer finance and nonprime submarkets represent a considerable opportunity set and provide an opportunity to deploy capital and generate attractive returns for investors,” the prospectus states.
The recent announcement that NextPoint will acquire LoanMe and Liberty Tax made it even more of a concern to Westin and others.
“Frankly, I don’t think he should be allowed to do it as a state senator, and he definitely shouldn’t be able to do it if he’s comptroller for the City of New York,” Westin said.