Lawmakers Trash Private Equity Report by Ernst & Young

November 21, 2019 | News, Private Equity

Sen. Elizabeth Warren,  Sen. Bernie Sanders, and other lawmakers call the report a result of “sham research.”

In a hard-hitting letter to Ernst & Young, the lawmakers alleged the private equity industry was fighting their Stop Wall Street Looting Act of 2019 “at every turn.”

“We have questions about the role your firm is playing in providing rigged reports and conclusions as part of this effort,” their letter also said. It was addressed to Carmine Di Sibio, Global Chairman and Chief Executive Officer, Ernst & Young AG.

Sen. Warren has a history of skirmishes with private equity and Wall Street. The Stop Wall Street Looting Act is her brainchild. It seeks to make PE firms responsible for the debts and pension obligations of their target companies. Further, it also limits and makes more transparent their payouts of fees, bonuses, and dividends.

Elizabeth Warren Vs Ernst & Young: Picture-perfect sham

Further, they went on to allege in the letter: “There is a myriad of other ways that corporate interests can wield their influence. One way they do so is by funding sham research – by consultants and researchers who receive big bucks for their work – to back up their views. The new EY report, prepared with and for a trade group for the private equity industry, appears to be a picture-perfect example of such sham study,” said the letter. [Emphasis added]

What the Ernst & Young report contains/claims

  • PE provides growth equity and skilled managers to needy companies
  • Annual wage and employment contribution by PE is $600 billion for 8.8 million workers
  • PE added $1.1 trillion in value to the US economy
  • $174 billion paid in taxes by the PE industry

However, Sen. Elizabeth Warren and the lawmakers have questioned, rebutted, or junked the above statistics and other data in the Ernst & Young report.

They also demanded information such as Ernst & Young’s remuneration for preparing the report. Additionally, they asked for data on how many jobs private equity-owned companies added or lost – broken down by industry.

[Related Story: HarbourVest Closes Fifth Fund at $3 Billion ]

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.

Alt Insights

May 21, 2020

Venture Capital: British Startup Offers Travel Jaunts on the Never-Never

Venture Capital: British Startup Offers Travel Jaunts on the Never-Never

Latest Alternative Investment News
Artificial Intelligence: Marty the Robot Hunts for Spills in Supermarket Aisles
May 26, 2020     Artificial Intelligence, News

Marty the supermarket robot is rather smart. Armed with three high-resolution cameras, computer vision, navigation systems, numerous sensors, and smart AI software, Marty is able to sidestep shoppers and pinpoint…
Venture Capital: The U.S. IPO Drought May be About to End
May 26, 2020     News, Venture Capital

As this is being written, the Dow is up nearly 600 points and the S&P 500 is above the psychological 3,000 mark. The markets are up as investors cheer the…
FinTech: Swiss Banking Giant UBS Homes in on Fintech Investing
May 26, 2020     FinTech, News, Venture Capital

Swiss banking giant UBS Group AG (NYSE: UBS) is planning to invest hundreds of millions of dollars in upstart fintechs through a proposed corporate venture capital fund. According to a…
Digital Assets: In India, RBI Confirms No Ban on Crypto; CoinDCX Raises $2.5M; Crypto Volumes Fly
May 26, 2020     Digital Assets, News

The Reserve Bank of India, the Indian central bank, confirmed that there currently exists no banking ban on the crypto industry in India. CoinDCX, India’s largest cryptocurrency exchange, gained a…

Scroll to Top