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Cities and states paying millions in secret fees to Wall Street
Key Excerpts from Article on Website of San Francisco Chronicle (San Francisco's leading newspaper)
Posted: May 4th, 2015
http://www.sfgate.com/opinion/article/Cities-and-states-payi...
Currently, about 9 percent or $270 billion of Americas $3 trillion public pension fund assets are invested in private equity firms. With the financial industrys standard 2 percent management fee, that quarter-trillion dollars generates roughly $5.4 billion in annual management fees for the private equity industry and thats not including additional performance fees paid on investment returns. Public officials are overseeing this enormous payout to Wall Street at the very moment many of those same officials are demanding big cuts to retirees promised pension benefits. With billions of public worker and taxpayer dollars put at risk in the highest-cost, most opaque investment schemes ever devised by Wall Street for a decade now, investigations that hold Wall Street profiteers accountable are long, long overdue, said former Securities and Exchange Commission attorney Ted Siedle. In a 2014 speech, the SECs top examiner, Andrew Bowden, sounded the alarm about undisclosed fees in the private equity industry, saying the agency had discovered violations of law or material weaknesses in controls over 50 percent of the time at firms it had evaluated. To date, however, the SEC has taken few actions to crack down on the practices, but some states are starting to step up their oversight.
Note: For more along these lines, see concise summaries of deeply revealing news articles about corruption in government and in the financial industry.
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