John

Private equity firms are the vultures of our economy. They buy up essential resources such as housing, hospitals, and nursing homes, load them up with debt, and strip them of their assets like stolen cars taken on joyrides. When the firms ultimately abandon the spent facilities, they take huge profits with them and leave behind empty husks and wrecked livelihoods.

Elizabeth Warren’s Stop Wall Street Looting Act is a comprehensive bill designed to halt these private equity hooligans in their tracks, remove the financial incentives, and hold them accountable for the responsible administration of facilities they take into their possession. Workers, customers, investors, and communities all come out ahead.

Private equity firms are “drooling over companies to exploit,” says Senator Warren. “The Stop Wall Street Looting Act ends these abusive practices by putting private investment fund managers on the hook for the companies they control, ending looting, empowering workers and investors, and safeguarding the markets from risky corporate debt."

“When private equity firms buy up homes and companies, they put profits over everything and everyone else,” says Senator Sherrod Brown. “I’m proud to cosponsor the Stop Wall Street Looting Act, to hold private equity accountable and put workers, families, and communities first.”

Senator Bernie Sanders also supports the Act. “Congress must ensure that the greed and recklessness of Wall Street can never destroy the livelihoods of everyday Americans ever again,” he says. “Now is the time to end Wall Street’s greed, protect workers, and create an economy that works for everyone, not just the 1%.”

Co-sponsor Senator Jeff Merkley says, “this legislation is a critical step in holding billionaires accountable and protecting consumers from predatory companies.”

Send a message to urge your members of Congress to co-sponsor and pass the Stop Wall Street Looting Act now!

This bill stops the private equity privateers through an array of disincentives and accountability requirements:

1. Private investment funds must have “skin in the game:” The crucial structural change is that equity firms will share liabilities with the companies they control. They can’t just flee the scene to avoid legal actions, debts they incur, or pension obligations to employees. There will be no more tax subsidies for using too much of other people’s money, and the carried interest loophole will be closed.
2. No looting allowed: The interests of the private equity firms will be closely tied to the interests of the portfolio companies, by banning investor dividends and job outsourcing for two years after a firm is acquired. This means no more short-term stripping or “extraction” of resources by bandits: they will need some longer term strategies to stay afloat longer.
3. No quick escape routes: Private equity firms won’t be able to just walk away when a company fails.
4. Increasing transparency to empower investors, including mandatory disclosure of fees, returns, and other investment information needed to “shop around” for investments.
5. Restore certain Dodd-Frank provisions that require firms that secure corporate debt to retain some of the risk incurred with the debt.

It’s no surprise that the private equity industry does not like this bill and will do everything they can to kill it. This is where we come in. Congress must hear our voices to see the widespread support for this Act among constituents!

Start writing now to send a message to your Congress members, urging them to cosponsor and pass the Stop Wall Street Looting Act now!

Thank you for protecting communities, consumers, and workers from private equity predators!

- Amanda

Amanda Ford, Director
Democracy for America
Advocacy Fund