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08/1/2019 | Holding Wall Street Accountable

CPD Releases Landmark Report on Private Equity

This month, CPD released Pirate Equity: How Wall Street Firms are Pillaging American Retail, a report that details how Wall Street firms have been driving economic inequality in our country for decades. As we’ve seen time and time again, Wall Street private equity and hedge fund managers load companies with debt, sell the best assets for personal gain, and leave hundreds of thousands of working people behind. 

Huge swaths of the retail sector, media companies, grocery stores, nursing homes and hundreds of thousands of our homes and apartments have all come under the control of Wall Street predators, bringing disaster to communities across the country. Millions more people who depend on fair and functioning markets, including investors, pensioners, and small businesses lose out. Women and people of color make up many of the victims of these practices. It’s a massive extraction of wealth from millions of Americans, all to make Wall Street billionaires even richer. 

Released in conjunction with the Stop Wall Street Looting Act that was introduced to the House and Senate this month, the publication was created in partnership with United for Respect, Americans for Financial Reform Education Fund, Strong Economy for All Coalition, Hedgeclippers, and the Private Equity Stakeholder Project. The report made headlines in by NPR Weekend Edition Saturday, Bloomberg (and Bloomberg Radio), Vox, The Washington Post, Forbes, and more. 

The Stop Wall Street Looting Act is meant to crack down on private equity and hedge funds to protect our jobs, our housing, and our communities. The legislation will:

  • Hold predatory private equity firms and hedge funds liable for the damage they cause

  • Ban key mechanisms of wealth extraction, like dividends (for a period after acquisition) and private equity management fees

  • Limit the amount of debt that these profiteers can access for seizing control of companies and require lenders to retain some of the risk those companies inevitably face

  • Close tax loopholes that encourage excessive debt and that let executives avoid paying their fair share of taxes

  • Protect workers when employers go bankrupt, and that let courts go after the wealth of private equity executives

  • Require private equity firms to be transparent with pension funds about the risks of investing in companies they have acquired

CPD’s Wall Street Accountability campaign worked with our allies at United for Respect—including thousands of former Toys “R” Us and Sears andKmart workers whose jobs and benefits were taken by private equity managers—and Americans for Financial Reform over the past year to develop policies that would stop the worst predatory practices on Wall Street and start holding billionaires accountable for the damage they’re doing to our communities and our economy.  

We’ll be working over the next year with CPD affiliates and lead sponsors like U.S. Senators Elizabeth Warren and Bernie Sanders and U.S. Representatives Pramila Jayapal and Mark Pocan to build public understanding and support for this effort, with new exposés on private equity abuses and more direct action protests targeting the bad billionaires.