Wall Street private firms and investment funds make their money by buying and selling companies. According to Vox, these firms raise money privately, usually getting the funding from “institutional investors, such as pension funds, or accredited investors — investors who meet a certain set of criteria that allow them to make riskier bets.”
With this “big money,” they typically go after companies that are either struggling or have a high potential for growth. They then repackage the company and sell them or find an exit strategy for them. This “exit strategy” is usually filing for bankruptcy or closing their doors resulting in hundreds of workers losing their jobs without severance pay. Businesses like Sears, Toys-R-Us, Payless, Shopko, and KB Toys have all been victims of this.
These Wall Street private firms also have their eyes on newspaper companies, casinos, grocery stores, and even nursing homes.
With the spotlight currently shining on economic inequality, it is time to demand some change, or at least provide more incentives around the way these private firms do business.
The Stop Wall Street Looting Act has recently been introduced by Progressives that could be a great start to helping dissolve this corruption. “The Stop Wall Street Looting Act will, for the first time, create sensible rules for the private equity industry that will allow productive investment to continue while halting the kinds of abusive practices that wipe out jobs and cripple strong companies,” writes Center for Economic and Policy Research Co-Director Eileen Appelbaum to Elizabeth Warren.
Sign the petition and help us tell Congress to consider the Stop Wall Street Looting Act as the first step towards halting these abusive practices.