ATR Response to Bloomberg Editorial re: Private Equity

To the editor:

Re: The Bloomberg Editorial Board’s column “Is Private Equity a Threat? We Need a Better Answer” (August 14, 2024):

The article fallaciously argues the next financial crisis may involve private funds. The proposed solution is more transparency, but this is a hackneyed idea. It also contravenes federal law. Congress never intended for private funds to be regulated just like banks, mutual funds, or ETFs. The Dodd-Frank Act makes a distinction between retail investors, who need more disclosures and protection, and sophisticated institutional investors. The U.S. Court of Appeals for the Fifth Circuit reaffirmed this distinction when it struck down the SEC’s rule to further regulate private fund advisers. Lawmakers, not regulators, have the power to change how private funds are scrutinized, but so far Congress has rightly declined. It needs to stay that way. 

Bryan Bashur

Director of Financial Policy, Americans for Tax Reform 

August 14, 2024