Category Archives: Private equity

401(k) Plan Abuses Finally Coming to Light

I doubt that I’m unusual in being a finance type who has heard about 401 (k) abuses and bad practices for a very long time. So it’s gratifying to see the Financial Times that something is finally being done to try to curb this behavior. But that is hardly the full extent of what is rotten in retirement fund land.

Whistleblower Describes How Private Equity Firms Flagrantly Violate SEC Broker-Dealer Requirements

Last week, Crain’s Business Daily and Fortune reported that whistleblower has provided the SEC with evidence of massive, ongoing violations of securities laws, specifically, the Securities Exchange Act of 1934, by several unnamed private equity firms.

How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme — Again

Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix

IRS Wakes Up to Private Equity Scam

For decades, the IRS has been oblivious to the tax dollars that private equity firms have been stealing from the U.S. Treasury via this abusive fee waiver tax shelter. But NC readers in the tax world have alerted us to recent IRS pronouncements indicating that both the Service, as well as influential tax commentators, have woken up to the scam and don’t like what they see in terms of its compliance with tax law.

Taibbi on How Wall Street is Looting Public Pension Funds

You must go, pronto, and read Matt Taibbi’s latest expose, on how hedge funds are plundering public pension funds, meaning pension funds managed on behalf of government employees like policemen, sanitation workers, and teachers. Taibbi describes how a concerted PR campaign has made workers the scapegoats for large pension shortfalls when in fact public officials and unscrupulous financiers (both through their machinations with these funds and via damage done by the global financial crisis) are the real perps.

Why You Should Not Trust the Financials of Private Equity Owned Companies

Yesterday, we discussed how a family private equity firm Swift River, which is owned in part by Tony James, Blackstone’s head of private equity business, purchased a software company called iLevel Solutions rom Blackstone itself.

Today, we are going to examine iLevel in greater detail. We will see that this company is built from the ground up as vehicle to convince PE investors and the SEC that Blackstone and other PE firms have implemented robust financial controls over the companies they own. The reality, however, is the opposite

How Private Equity Executives Like Blackstone’s Tony James Engage in Dubious Side Deals

Today, we’ll examine conflicts of interest involving principals at the private equity firms themselves. Here our object lesson is private equity kingpin Blackstone Group.

Matryoshka Doll, Private Equity Edition

From Item 2(a) in the December 31, 2007 13G filing for SuccessFactors, Inc., on page 5:

Beware Private Equity Guys Bearing Gifts: Eminent Domain Mortgage Scam Hit with Well-Deserved Lawsuit

The private equity firm Mortgage Resolution Partners looks to be well on its way to getting the good uses of eminent domain torpedoed by getting some not-too-swift municipalities to sign up for its self-serving scheme. One indicator of how dubious the MPR program is that investors who have been complacent in the face of all sorts of abuses by originators and servicers, have roused themselves to act in a unified manner and push back against the MRP plan, in the form of a suit filed in Federal court in California on Wednesday.

Memo to Eliot Spitzer: If Even Harvard’s Own Law Firm is More Loyal to Bain, How Can You Get Good Legal Advice?

The saga of Harvard Management Company’s relationship with its lead law firm, Ropes & Gray, is a cautionary tale for those who like to believe that private equity investors are doing a good job of taking care of their interests. Just follow the money.

Memo to Eliot Spitzer: Private Equity Firms are Scamming New York City

Eliot Spitzer, now the top contender to be the next New York City Comptroller, has said he wants to use the office to pursue financial reform. He has a ready, obvious, and comparatively easy target: the private equity industry.

Four Headwinds to the US Housing Recovery

Yves here. This post from MacroBusiness describes three risks facing the American housing recovery, and I thought I’d add a fourth, which is the open question of how much longer private equity funds and other speculators will continue to bid up housing prices.

Wall Street and Unions Have Knives Out Against Spitzer’s NYC Comptroller Run

Nothing like the prospect of someone with a high profile and a track record of going toe to toe with powerful interests and rich enough not to be beholden to party machinery to bring out all sorts of hacks and score-settlers.

So Who is the Dumb Money Ruining the Rental Housing Market?

The head of Carrington, which is known as an established distressed debt investor and more recently, an early entrant in the single family home rental business, said this week it was no longer buying houses for lease because dumb money had ruined the market.