- The private-equity industry largely escaped regulatory scrutiny prior to the financial crisis, but no more after Dodd-Frank mandated greater oversight of asset managers. According to a Bloomberg, an SEC review finds more than half of P-E firms inflate fees and expenses charged to portfolio companies, raising the prospect of a wave of sanctions from the agency.
- Last month, the SEC filed a case against Clean Energy Capital and founder Scott Brittenham, accusing them of misusing more than $3M in funds. The money, says the SEC, should have gone to investors. Clean Energy denies the accusation.
- “The industry is going to be forced into change because, frankly, when your big investors are public plans and other money that’s run by fiduciaries, you can’t afford as a business matter to be deemed to be engaging in fraud,” says attorney Barry Barbash. “Fraud doesn’t sell very well.”
- ETFs: PSP, PEX