SEC Fines Private-Equity Firm Where Bayh Works Record $53M
Published On August 24, 2016 by Bloomberg News and IBJ Staff
Apollo is the latest company sanctioned in an industrywide sweep into whether private equity firms put their own interests ahead of investors. The Wall Street Journal said Apollo must pay more than $40 million back to pension funds and university endowments in the largest private equity settlement to date.
Bayh, a Democrat who is running against U.S. Congressman Todd Young, R-Indiana, for the U.S. Senate seat being vacated by Sen. Dan Coats, has worked for Apollo since January 2011. Bayh, a former Indiana governor, is seeking to return to the Senate after serving there from 1999 to 2011. He joined Apollo less than three weeks after leaving the Senate.
Jeff Cardwell, chairman of the Indiana Republican Party, called for Bayh to resign from the firm Wednesday.
“It’s bad enough that Evan Bayh used his public position to make millions for himself,” Cardwell said in a written statement. “If he truly stands for Hoosiers, it’s time for Bayh to resign from Apollo and distance himself from this corporate corruption. Hoosiers deserve to know whether Evan Bayh stands for bankers on Wall Street or Hoosiers on Main Street.”
Four fund advisers affiliated with Apollo failed to adequately disclose lump-sum payments it expects to receive from the sale of portfolio companies, the SEC said in a statement Tuesday. That reduced amounts available for distribution to fund investors, the SEC said. New York-based Apollo, which didn’t admit or deny wrongdoing, agreed to pay a $12.5 million penalty and about $40 million in disgorgement and interest.
Wall Street’s top cop has made policing private equity fees a priority. Blackstone Group LP and KKR & Co. were both fined last year by the regulator over how they informed investors of fund costs. The agency has focused on what’s known as accelerated monitoring fees, which firms charge the companies they own for services like advisory and legal work. The practice lowers the value of portfolio companies, which reduces potential profits available to clients.
“A common theme in our recent enforcement actions against private-equity firms is their failure to properly disclose fees and conflicts of interest to fund investors,†Andrew J. Ceresney, head of the SEC’s division of enforcement, said in the statement.
The former senior partner, whom the SEC didn’t name, was caught twice for improperly charging personal expenses to Apollo funds and portfolio companies from January 2010 through June 2013, according to the agency. That partner was Ali Rashid, according to two people with knowledge of the matter. Rashid left the firm in 2014.
With only repayment and a verbal reprimand as punishment, Apollo failed to find other instances where the partner saddled the fund with personal expenses. A firm-wide review led to the discovery of the additional charges, which resulted in the partner’s January 2014 departure from the firm.
“Apollo seeks to act appropriately and in the best interest of the funds it manages at all times,†Eric Kuo, an outside spokesman for Apollo, said in an e-mailed statement. “Long before the SEC inquiry began, Apollo had enhanced its disclosure and compliance relating to these matters.â€
“Wall Street’s top cop has made policing private equity fees a priority. Blackstone Group LP and KKR & Co. were both fined last year by the regulator over how they informed investors of fund costs.”
Damn, did I read “regulator” in there?
I thought regulations and regulators were the ruination of Capitalism and the American way of life according to the Republican Party.
But I have one better than that. Governor Rick Scott of Florida who has been elected twice, presided over a company who had to pay the largest fine for defrauding Medicare in history, $1.7 billion dollars.
Florida – The place Social Security and Medicare recipients from the North go to retire so their joints work a little while longer were more than happy to re-elect a crook who at one time was trying to cheat them out of their last hurrah in the sun.
Moral to the story – This election is proving mosquitoes have been injecting ignorance in the populace WAY before Zika came along.
But what the Hell, you only live twice.
Once before you’re married, and once after you’re divorced….
This goes a long way to explain why Evan Bayh is wanting his old job back in Indiana.
I don’t know Joe, pretty impressive history here;
Bayh formally entered politics in 1986 when he was elected Indiana’s secretary of state. Just two years later, he was elected governor. He was first Democrat in 20 years to hold that office and, at 33, the youngest governor in the U.S. Although consistently popular, Bayh’s administration was considered cautious. But supporters say he met challenges such as the rising costs of Medicaid and the need for more prisons while cutting taxes and balancing the budget. He was re-elected governor in 1992 with 62% of the vote, the highest percentage of the vote in a statewide election in modern Indiana history. By the end of his second term Bayh had an approval rating of nearly 80 percent. After his second term expired in January 1997, Bayh accepted a lecturing position at the Indiana University School of Business in Bloomington.
Election to U.S. Senate
In 1998, Bayh returned to politics and was elected to the U.S. Senate seat formerly held by his father. Bayh defeated Paul Helmke with 64% of the vote, the largest victory margin ever by Democrat in a U.S. Senate race in Indiana. In 2004, he was re-elected by soundly defeating Republican challenger Marvin Scott.
But time will tell bro….
Cheap attempt to smear our once and future senator by association. No allegations he did anything wrong. Evan Bayh will make us a fine senator, again.
Whoever heard of Jeff Cardwell? Whoever he is, apparently the chairman of the Indiana Republican Party, I call on him to resign.
If we want to talk about shady business practices, lets talk about Trump and his housing discrimination fines, hiring of undocumented workers, stiffed subcontractors, and flat out scams like Trump Network and Trump University. I’ve never seen an article here about any of those things, but I’ve seen the same article about Sec. Clinton’s speaking fees run two or three times.
I suspect the reason for this informative article appearing here is contained in the polls. This is how it is and it is likely to stay this way. http://www.realclearpolitics.com/epolls/2016/senate/in/indiana_senate_young_vs_bayh_vs_brenton-6109.html
+7 will be hard to overcome. Birch Bayh would be proud of his Hoosier son. He’s certainly got my vote whether or not he can remember some address in Indy he hasn’t used much in the past few years.
If Trump supporter the filthy racist Little Paulie LeRage goes off again over the weekend it will continue to demonstrate to the public just what kind of people are supporting that corrupt clown. If he includes death threats like he is wont to do, it’ll result in calls to make him Secretary of Peace in the fantasy Rump administration. His supporters just love those death threats.
The only chance Young really has is if Hoosiers are as ignorant as I fear they are, and Trump wins the state with a 10 point margin.
Trump’s up around 8½ now in Indiana. If he continues to run a campaign seemingly designed to showcase his total lack of knowledge of the issues, it won’t necessarily wake up the somnambulant Indiana voters but it won’t add any either. With his increasingly loutish behavior his final margin in Indiana could be down around 6. Probably not enough to get Todd Young in.
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