The problems the SEC identified include fund managers’ failure to make full and fair disclosure of conflicts of interest, charging improper fees, and failure to implement policies to prevent staff from trading on material non-public information. In other words, the SEC’s examinations have shown that private equity and hedge fund managers are consistently engaged in self-dealing and overcharging investors, like pension funds that provide for the retirement security of millions of Americans.
Private equity firms often profit from mass incarceration and they expand inherently racists business practices in communities of color. Private equity is behind manufacturers of weapons used against people protesting police brutality against the Black community.
Fact Sheet: Private Equity Industry Poised to Profit from the Federal Reserve’s New Lending Programs
Private equity funds could access government assistance for their portfolio companies while avoiding any responsibility to repay any debt or obligations to the public purse. Private equity firms could also tap government aid to finance leveraged buyout purchases of additional companies, using public money to load target companies with debt and drain their assets while avoiding any responsibility for paying that debt back.
Unless Congress and regulators act, private equity will shed its nonperforming assets and feast on new ones. J. Crew is the latest example.
Private equity firms loaded J. Crew with debt and hid assets away from investors and creditors.
Preppy retailer cannot survive retail and coronavirus economic downturn saddled by private equity-imposed financial burdens.
More and more as we go about our lives, the money we spend is siphoned off to enrich Wall Street firms. Private equity’s pet profiteering is just one way these investors have taken over so much of the economy and our daily lives.
Policy Recommendations: Critical Post-CARES Act Financial Policy Steps to Respond to the Coronavirus
Americans for Financial Reform released a set of financial policy recommendations for Congress to fix the problems and loopholes in the CARES Act, to further protect and support individuals, families and communities in the face of this crisis, and to lay the groundwork for an equitable and sustainable economic recovery.
Together, these facilities could deploy up to $2.3 trillion in new credit to the economy during the pandemic crisis period. Without major changes these facilities will not be effective in getting assistance to those most impacted by the crisis, and disclosure and transparency regarding specific borrowers and loan terms is lacking. Our comment provides specific recommendations to address these issues.
Private equity firms have driven much of the rise in surprise billing that threatens the financial stability of vulnerable patients as well as families’ health and peace of mind.