How Private Equity Firms Defraud Investors By Extracting 'Fees' From Their Portfolio Companies

"The modern private equity industry got its start in 1979 when, for the first time, a large, publicly traded company was taken private in a leveraged buyout. For the next 30 plus years, the industry escaped regulatory oversight by the Securities and Exchange Commission (SEC) by adopting complex and opaque organizational structures designed for that purpose. That changed with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in the wake of the recent financial crisis. Since 2012 most mid-size and large private equity funds have been required to disclose their activities to the SEC. Last week reports of what the SEC found began to leak out.

Staff at the SEC has reviewed about 400 private equity funds. What did they learn?"