FOR IMMEDIATE RELEASE
Aug. 31, 2023
Several Organizations Commend SEC for New Private Fund Rules that will Better Protect and Empower Retirees
Several organizations today joined together to express support for the Securities and Exchange Commission’s (SEC) rule last week that would better protect retirees and savers from the lack of transparency in the $25 trillion private fund industry that has allowed it to overcharge its investors for decades.
The new rules from the SEC’s will require that private funds – primarily private equity and hedge funds – must disclose all their fees and expenses in a clearer, standardized fashion so that investors on behalf of retirees and savers more clearly see what they are being charged for, and can better use this new information to negotiate against their fund advisers or take their money elsewhere.
Andrew Park, Senior Policy Analyst at Americans for Financial Reform Education Fund: “The lack of basic, comparable information on investment terms in an industry that has grown exponentially in the last decade has enabled a massive transfer of wealth from savers and retirees to private fund executives, many of whom now have a net worth in the billions. The SEC is using the traditional, time-tested tools of transparency and disclosure to reinvigorate this part of our capital markets.”
Brandon Rees, Deputy Director of Corporations and Capital Markets, AFL-CIO: “The labor movement welcomes the SEC’s private funds rules that levels the playing field between the general partners of private equity firms and their investors including pension plans. The transparency provided by the SEC’s new rule will help lower pension plan investment expenses, and thereby enhance the retirement security or working people”
Michael Kink, Executive Director, Strong for All: “The United States government is now requiring hedge fund and private equity managers to tell investors the truth, the whole truth and nothing but the truth – and it’s clear they wouldn’t be telling us the truth without strong government action. Any effort by billionaire fund managers to fight these protections in court means that they just want to keep lying, and that should be illegal”
Bianca Agustin, Co-Executive Director, United for Respect: “By establishing new requirements that will increase fairness, transparency and accountability, the SEC will be able to rein in the worst private equity practices by shining a light on exorbitant fees and previously hidden expenses. Savers and retirees have long been exploited by the private equity industry, which has evaded serious federal oversight for years and utilizes loopholes to extract wealth from working people. United for Respect will continue our efforts to hold Wall Street accountable, working to implement even more regulations to stop greedy executives from profiting off our communities”
Inquiliinxs Unidxs Por Justicia: “At United Renters for Justice, we hope the new SEC private fund rules will support Progress Residential tenants organizing for more dignified, stable housing by ensuring investors have transparent information to make decisions that support renters, not just profits”
Rohan Brown, Private Equity Coordinator, As You Sow: “We wholeheartedly applaud the SEC’s new rules aimed at enhancing the regulation of private fund advisers. This step underscores a commitment toward accountability, transparency, and fairness within our financial system. By prioritizing investor protection and market integrity through increased disclosure and ethical practices, the new SEC rules will contribute to a more equitable and resilient investment landscape”
Stephen Hall, Legal Director and Securities Specialist, Better Markets: The final rules the SEC adopted represent significant and long overdue progress in reforming the private funds industry and reducing conflicts of interest that serve no purpose than wealth extraction. While not perfect, they will increase transparency by requiring private fund advisers to provide investors with crucial and standardized information about a fund’s fees and performance, and they will limit the preferential treatment of some fund investors over others. In addition, the annual audit requirement will ensure that investors have some independent insight into a fund’s condition, which will better protect the tens of millions of everyday Americans who rely on private funds as they save for retirement”