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The SEC has reportedly begun an informal investigation of P-E firms, including whether they...

The SEC has reportedly begun an informal investigation of P-E firms, including whether they inflate the valuations of their assets when raising new funds. The agency has sent letters requesting information about investments and how they're valued, as well as about PE firms' investors and their communications.
Comments (7)
  • bbro
    , contributor
    Comments (9372) | Send Message
     
    You want to see some funny business look at the books of P-E firms...
    12 Feb 2012, 04:18 AM Reply Like
  • Poor Texan
    , contributor
    Comments (3529) | Send Message
     
    I guess the P in P-E stands for Public.
    12 Feb 2012, 11:53 AM Reply Like
  • Michael Clark
    , contributor
    Comments (8389) | Send Message
     
    If they are cheating, hang them -- 'private' is not a sacred word.
    13 Feb 2012, 07:26 AM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    And the timing of this has nothing do do with Mitt Romney?

     

    OK..........

     

    P/E stands for Pre-Election
    12 Feb 2012, 04:13 PM Reply Like
  • Josh Krause
    , contributor
    Comments (1361) | Send Message
     
    PT - Only if they lose money. Remember your moral hazard mantra: "Privatize the gains, socialize the losses"
    12 Feb 2012, 05:24 PM Reply Like
  • User241885/(FAMCO)
    , contributor
    Comments (240) | Send Message
     
    It's a pretty well known fact that since the SEC missed Bernie Madoff, even after being tipped off by Harry Markopolis for over two years, and also skirting its own conflict of interest rules by having a Madoff relative overseeing that very investigation the agency is desperately looking for a win.

     

    While any of the allegations if substantiated, it would clearly put them back on the right track. But the reality is that the SEC wants to regain its credibility and watchdog status. Unfortunately, as 1980XLS-2.0 poignantly notes, this is about political defense, not about enforcement offense.

     

    FAMCO
    12 Feb 2012, 09:16 PM Reply Like
  • User241885/(FAMCO)
    , contributor
    Comments (240) | Send Message
     
    If the SEC wants to bag the big game by investigating private equity firms for inflating values, maybe they first should start serving subpoenas to the executives at Fannie Mae and the other GSE's. Oh, right, they finally did last week after a two decades of inflated valuations.

     

    At that time, Freddie Mac CEO Dick Syron postponed reporting quarterly earnings for over eight months...and this is a public company...because they could not value the portfolio in both the notional value of the derivatives or the underlying mortgage securities themselves.

     

    Let's not stop with the quasi-public entities. How about the US Treasury's TARP funding which allowed purchases of portfolios, starting with AIG, that had next to no way to value. Why stop there? So long as they keep interest rates under whole numbers, anyone can afford to buy what the US Treasury now needs to unload.

     

    Thank you Mr and Mrs Taxpayer for not making any complaints whatsoever about these intentional and criminal acts of over-valuation. Your past and future contribution to TARP far exceeds any pension fund or endowment investment in private equity. The big difference is, unfortunately in your case, the law of large numbers did not work for you.

     

    Just as unfortunately, the SEC enforcement division will not work for you either.

     

    FAMCO
    15 Feb 2012, 10:56 PM Reply Like
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