Trump’s Nearly $500M Civil Fraud Penalty Tossed By New York Appeals Court

A New York appeals court on Thursday struck down a nearly half-billion-dollar fraud penalty against President Donald Trump and his company in a civil case over asset valuations, but upheld the finding of liability. 

This gives Trump a financial victory while affirming that he broke the law. The ruling vacates a February 2024 judgment from a Manhattan trial judge, who found that Trump inflated the value of his assets for more than a decade to secure favorable loan terms. The appeals panel called the penalty “excessive” but maintained that Trump’s conduct violated state law.

“Presiding Justice Renwick and I [Moulton J.] find that the Supreme Court correctly found defendants liable. We agree … that the Attorney General acted well within her lawful power … However, we would modify the remedy ordered by the Supreme Court … the court’s disgorgement order … is an excessive fine that violates the Eighth Amendment,” the opinion stated.

The decision erases one of Trump’s largest financial liabilities but leaves intact a legal finding of fraud that could carry reputational and business consequences. It also increases scrutiny on New York Attorney General Letitia James, who is facing a federal probe into whether her lawsuit infringed on Trump’s rights.

In a partial dissent, one justice argued the attorney general’s case was politically motivated, saying the “true aim” was to derail Trump’s business and political career.

“I greatly respect the fact that the Court has the Courage to throw out this unlawful and disgraceful Decision that was harming Business all throughout New York State,” Trump said in a post on Truth Social. 

U.S. markets were trending lower ahead of Powell’s speech at Jackson Hole on Friday. The SPDR S&P 500 ETF (SPY) was down 0.4% in midday trade, the SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.38% and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) was the worst hit, falling 0.5%. However, retail sentiment around QQQ on Stocktwits improved to ‘neutral’ from ‘bearish’ territory over the past day.

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