The Phaserl


Defending Capitalism with Josh Sigurdson of World Alternative Media

from TheAnarchast:

Help us spread the ANTIDOTE to corporate propaganda.

Please follow SGT Report on Twitter & help share the message.

1 comment to Defending Capitalism with Josh Sigurdson of World Alternative Media

  • rich

    Wells Fargo Isn’t the Only Firm That Needs a Lesson
    Consider a case involving Apollo Global Management, the private equity giant overseen by Leon Black. In late August, the Securities and Exchange Commission brought an enforcement action against the firm, contending that it had breached its fiduciary duty to investors by not disclosing specifics on fees it was extracting. The suit followed other improper fee cases filed by the S.E.C. against the Blackstone Group and KKR.

    In settling the case, Apollo agreed to return fees of $40.3 million to clients. By contrast, Wells Fargo returned improper fees of $2.6 million.

    Apollo has many public pension funds as investors, including California Public Employees’ Retirement System, the Teacher Retirement Systems of Texas and the Oregon State Treasury.

    I asked Apollo if it had received flak of any kind from its public pension fund clients after the S.E.C.’s findings. Charles Zehren, its spokesman, declined to comment.

    But in an Aug. 23 letter to clients, Apollo played down the S.E.C.’s action. It said the problematic practice was common in private equity and that it had disclosed fee specifics to advisory committees at each fund. “It is important to recognize that Apollo did not admit to any wrongdoing in this settlement,” it said.

    I asked this of the 13 public pension funds that, like Calpers, had invested at least $100 million in the Apollo VII portfolio. That list included funds benefiting teachers in California, Illinois, Ohio and Texas; public employee retirement systems in Colorado, Florida, Maryland, New York state, Oregon and Wisconsin, and funds benefiting firefighters and police officers in New York City.

    Some funds didn’t respond; one declined to comment. And some said they had responded to the S.E.C. case by increasing their demands for fee transparency from Apollo and other investment managers. That’s not enough to move the accountability needle.

    Others like Calpers and the California State Teachers’ Retirement System told me they were monitoring the Apollo situation. Fine, but isn’t that their job?

    Matthew Sweeney, a spokesman for the New York State comptroller and overseer of the Common Retirement Fund, seemed to indicate that assessing an investment firm’s potential return took a higher priority than weighing a manager’s integrity.

    The view these fiduciaries took on Apollo’s breach could not be clearer: There’s nothing here. Move along.

    Puzzled by this passivity? So is Lynn Turner, former chief accountant at the S.E.C. and a board member of the Colorado Public Employees’ Retirement Association. He stressed that he did not speak on behalf of the Colorado pension, which holds the Apollo VII Fund.

    He said, “When a firm such as Apollo acts in a manner that violates a fiduciary obligation a pension fund has to its investors as well as securities law, the pension fund trustees need to find a new asset manager who puts the interest of those investors ahead of lining their own pockets.”

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>