The Industry Offenders Are Busy Eliminating Transparency

Dodd Frank is 7 today

This article by Senior Economist Eileen Applebaum at the Center for Economic and Policy Research (cepr.org) published in the Huffington Post is very revealing and calls readers to action. She tells us that Pres. Donald Trump has appointed two private equity managers to important authoritative posts for the financial industry. They are Wilbur Ross, Secy of Commerce and Stephen Schwartzman, Co-founder of Blackstone Group who is now head of Trumps Economic Policy Forum. It seems rather obvious that these two have something to gain from de-regulation while industry groups composed of Private Equity managers overwhelmingly support regulation. They cite the value of consumer confidence that is instilled by the presence of regulations, regulators and monitoring. The article contains some serious charges to Private Equity prior to the 2007-2008 industry shock such as manipulation of the price of holdings; failure to share fees with investors; and “incorrectly” charging fee expenses.
The Trump Admin. seems to be pushing the Hensarling Ammendment that would exempt Private Equity managers from registration and reporting requirements by the securities industry. The Hensarling Ammendment is called the CHOICE Act.
President Trump leads the charge against consumer protection and Wall St. regulation by declaring Dodd-Frank to be “horrendous”. One has to wonder why Trump is plunging ahead to eliminate many reporting requirements and oversight of financial institutions still in the wake of the near financial meltdown just 10 years ago. How could the public be harmed by the required registration of PE managers who might have discretionary control over billions of dollars? A good deal of capital from public pension plans is held in private equity funds. Shouldn’t they enjoy the increased security of their investment brought by sound regulation? These are assets of good public servants, after all.