Since former President Donald Trump was fined $355 million for consumer fraud in a New York courtroom, many business people have stated that they don’t trust doing business in the blue state anymore.
This ruling has left many of them feeling that it could potentially be unsafe to conduct business throughout New York, as what happened to Trump could end up happening to them. As a result, many have stated that they’re leaving — and they’re taking their business with them.
The Ruling Against Trump
A New York judge found that Trump fraudulently overstated his net worth in order to then trick lenders into loaning him money. As a result, Trump was fined $355 million for these actions.
However, the judge also banned the former president from conducting business in New York for the next three years. During this timeframe, Trump cannot serve as an officer or director of any corporation within the state.
Immediate Backlash
For some business owners in New York, this trial — and eventual fine and verdict — left them angry. They felt that the government was unfairly going after business owners throughout the state.
To these critics, if the state could easily do this to the former president, then it could seamlessly do this to any other company owner who conducts business in New York.
New York Governor Reassures Businesses
This public outrage eventually got so loud that New York Governor Kathy Hochul, a Democrat, spoke out to calm any concerns that businesses in the state may have.
According to Hochul, these business owners have “nothing to worry about.” Hochul was previously asked whether Trump’s trial was proof that they could go after any business. She rejected this idea.
Hochul Says Trump’s Situation Is Different
Hochul, in response to many questions about how business owners should feel, explained that she views Trump’s situation very differently from how an average business person goes about their work.
“I think that this is really an extraordinary, unusual circumstance that the law-abiding and rule-following New Yorkers who are business people have nothing to worry about, because they’re very different than Donald Trump and his behavior,” Hochul stated.
Outrage Remains
However, even though Hochul has attempted to quell this unrest among the business class, it hasn’t seemed to have worked yet. The outrage over this trial remains.
It has caused some business owners to publicly state that they’re going to leave the state of New York, taking their business with them. For some, they think heading out to states like Florida or Texas offers better — and safer — opportunities.
Real Estate Investors Are Against the Trump Ruling
Many real estate investors, such as Cardone Capital’s Grant Cardone, have stated they’re already moving from New York to conduct their business elsewhere.
“We thought this year was the opportunity to come into Chicago, California and New York City. I’ve been waiting for 40 years now to invest in that marketplace. I was completely confident this was the year to come,” Cardone explained. “And when that ruling happened, it was like, pencils down. Don’t touch it. Don’t go there.”
Cardone Is Focusing on Texas and Florida
According to Cardone, his firm will “immediately discontinue” all underwriting that they were doing on New York City real estate. Instead, Cardone and his firm are going to focus on other real estate markets.
For starters, he has said that markets in Texas and Florida look much better than the current market in New York. As a result, they’ll focus more on doing business in these states.
New York Is Too Risky
Cardone has stated that now, after Trump’s ruling, New York is too risky of a place to do business in. Cardone isn’t alone in this assessment. Many other business owners and conservative politicians have also made this claim recently.
Cardone has said the blue state’s risks “outweigh the opportunities.” The real estate investor has also claimed that financial aspects, such as evaluating your property and getting a loan, may become much harder now in the state.
Investors Leave New York
Cardone has other investors and business owners echoing his statements. Kevin O’Leary, an investor and “Shark Tank” personality, has also publicly declared he will never invest in New York again.
“New York was already a loser state like California is a loser state. There are many loser states because of policy, high taxes on competitive regulation,” O’Leary said. “I would never invest in New York now. And I’m not the only person saying that.”
No Victims
O’Leary also talked about how he didn’t agree with the court case in the first place, as there was no victim.
“Every investor’s worried because where is the victim? Who lost money? This is some arbitrary decision a judge made,” O’Leary explained.
Business People Don’t Believe Hochul
O’Leary was also asked about Hochul’s comments and how most business people in New York are honest, law abiding citizens — whereas, to Hochul, Trump isn’t. O’Leary disagreed with her assessment.
“I’m sorry her words fall on deaf ears to everybody,” he stated. “There’s nothing she can say to justify this decision. And this has nothing to do with Trump… this is not a Trump situation. This is a New York problem now.”
Trump Praises O’Leary
Upon hearing of the comments that O’Leary made about New York, Trump quickly took to social media to praise the businessman.
“Kevin O’Leary is so great, and tells it like it is,” he wrote on Truth Social. “Businesses will flee NYC & State after the Corrupt Judge’s ruling!”
Legal Scholars’ Opinions
Many business owners in New York have expressed concern over this new precedent the courts have made. However, legal scholars in the United States have also publicly entered the conversation.
“[T]he court admitted that not a single dollar was lost by the banks from these dealings. Indeed, witnesses testified that they wanted to do more business with Trump, who was described as a ‘whale’ client with high-yield business opportunities,” Jonathan Turley, a George Washington University Law School professor, said. “Undervaluing and overvaluing property is a longstanding practice in New York real estate.”
Trump’s Early Warnings
Trump has been warning about what this ruling would do to New York since at least 2023. According to the former president, the entire case against him is a disgrace — and could be potentially harmful to business owners in New York.
Trump’s early warnings seems to be right in line with what many of his fellow New York businessmen are saying today.
Trump on New York Business
“Businesses are watching this case,” Trump said in 2023. “No business will go back into New York, no business will frankly stay in New York, some businesses are talking about leaving New York because of this action, this very serious action.”
Trump has also explained that he did nothing wrong. “If you look at the case, we did nothing wrong, there were no victims,” he stated.
Other Criticisms
While most of the criticisms from business owners in New York lie with how they could suffer as Trump did in court, others have claimed the government only went after the former president because of who he is.
“Democratic NY Governor Hochul effectively tells NY businesses not to worry — it was all about getting Trump,” Tom Fitton, Judicial Watch president, claimed.
Wall Street Firms Flee New York
Interestingly, Trump’s verdict just adds on to the reasons why many businesses and firms have decided to leave behind New York City for good.
According to Bloomberg data, Wall Street firms have been leaving the city since 2019. In total, about 160 different firms have left New York in this short time frame.
A $1 Trillion Loss
This data has also revealed that these firms have taken about $1 trillion with them as they’ve moved headquarters. Clearly, New York is losing quite a lot of business.
Trump’s ruling — and the outrage among many business and financial professionals — will possibly only further this ongoing mass migration that has seen businesses flee the city.
Better Business in Florida
Where are these Wall Street firms and investors heading? Different places. For the most part, however, many have decided to make their new headquarters in none other than Florida.
Florida has increasingly become a safe haven for these departing businesses. Many wealthy New York business people have also decided to start over in the Sunshine State, choosing to buy homes there.
Tax Revenue Implications
As more Wall Street companies decide to leave New York behind, there are many tax revenue implications that could occur. If even more businesses feel frustrated with the state over Trump’s rulings, tax revenue will likely decline.
Already, experts are sounding the alarm bells about this potentially massive issue.
An Upcoming Decline
According to a recent report, New York financial firms paid about $5.4 billion in taxes last year. This equals about a quarter of all personal income tax collections in New York.
This report has already warned about the ongoing mass migration of Wall Street firms, as the report says that this upcoming year will likely see a “significant decline” in collected taxes.
Jobs Are Also Fleeing New York
Naturally, if more businesses decide to leave the city or state thanks to Trump’s fraud ruling, then jobs will also go with these companies.
Reports have, therefore, also warned that the city could see job losses in the near future. One report also says that these jobs have been relocated — to cities and states that have a lower cost of living.
A Migration to the South
While many high level business owners have clearly stated that they’re going to states like Florida and Texas — red states with outspoken governors — many other Southern states are also seeing more businesses find new headquarters within their borders.
Cities like Nashville have seen a bump in business moves. Meanwhile, states like North Carolina and South Carolina have also experienced a rise in business.
