Newly appointed Lt. Governor Brian Benjamin stands to make a hefty profit from insider stock he holds in a company that arranges loans with interest rates up to 500% and has been sued repeatedly, THE CITY has learned.
Gov. Kathy Hochul recently tapped Benjamin for her old job after she succeeded Andrew Cuomo, who resigned amid sexual harassment allegations and other scandals.
Benjamin, a Manhattan state senator for the past four years, is set to be sworn into his new role on Thursday.
The Harvard Business School grad got the inside edge via his role as a founding board member of Next Point Acquisition Corp., an investment firm that earlier this year bought the oft-sued California firm LoanMe, records show.
Benjamin resigned from NextPoint’s board in March, but kept his stock. THE CITY estimates that Benjamin could net a hefty $80,000 profit off what appears to be his initial $4,100 investment if he sold the stock tomorrow on the Toronto Stock Exchange where it’s traded.
The California-based LoanMe arranges small personal and business loans for borrowers with troubled credit histories, using banks in states with few restrictions on interest rates. LoanMe borrowers are then on the hook for interest rates of 98% to 500%, plus fees, according to rates in some states posted on the company’s website.
LoanMe does no business in New York because interest rates on most loans are by law capped at 16% per annum. The state considers rates higher than 25% to be criminal.
LoanMe has been sued 33 times in seven states in the last five years, records show. The firm has settled all but two of those lawsuits under terms that remain sealed, records show.
In some suits, consumers charged that LoanMe bombarded them with texts and robo calls pushing them to take out loans. In others, borrowers alleged LoanMe employed similar harassment if they were late with payments.
Some borrowers have also alleged LoanMe reported to credit rating agencies that they still owed money even after they’d paid their debts — an erroneous claim they said destroyed their credit.