"Private equity firms get rich off of stripping assets from companies, loading them up with a bunch of debt, and then leaving workers, consumers and whole communities in the dust," Ms. Warren said in a news release. "The Stop Wall Street Looting Act ends these abusive practices by putting private investment fund managers on the hook for the companies they control, ending looting, empowering workers and investors and safeguarding the markets from risky corporate debt."
The bill's other co-sponsors in the Senate are Tammy Baldwin of Wisconsin; Sherrod Brown of Ohio, chairman of the Senate banking committee; Jeff Merkley of Oregon; and Bernie Sanders of Vermont. House co-sponsors are Jesus Garcia of Illinois; Eleanor Holmes Norton of Washington, D.C.; Pramila Jayapal of Washington; and Mark Pocan of Wisconsin.
Ms. Warren and a group of lawmakers originally introduced a version of the bill in July 2019, but it did not move.
Wayne Moore, who serves on the board of retirement trustees of the $73.8 billion Los Angeles County Employees Retirement Association, Pasadena, Calif., said in the news release announcing the bill that he's witnessed "exploitative investment tactics in the private equity industry. Using workers' retirement savings, the industry has enriched itself at the expense of a generation of workers with less retirement security and a future generation with less opportunity for retirement. The rules of our economy must protect workers from this kind of exploitation by ensuring risks and rewards are shared by all. The Stop Wall Street Looting legislation does just that."
Drew Maloney, president and CEO of the private equity advocacy group American Investment Council, has a different point of view. In a statement, Mr. Maloney said that the bill should be renamed the "Stop Main Street Investment Act."
He added: "As families and local economies across the country continue to struggle, Sen. Warren's irresponsible bill would discourage small business investment, destroy jobs, hurt retirements and threaten investments in important fields including sustainability and life sciences."
Shortly after the bill was reintroduced Wednesday, the Senate banking committee's Subcommittee on Economic Policy held a hearing called "Protecting Companies and Communities from Private Equity Abuse." Ms. Warren chaired the hearing.