Tuesday, July 10, 2007

Kucinich to Hold Hearing on Blackstone IPO

Last month, Mr. Kucinich failed in his last-minute attempt to get the Securities and Exchange Commission to delay the Blackstone Group’s $4.7 billion I.P.O., which he said could pose new dangers for ordinary investors. But he is not giving up: On Wednesday, he plans to hold a congressional hearing on the implications of allowing small investors to buy shares in hedge funds and private equity funds.
In doing so, he continues Capitol Hill’s recent scrutiny of the private equity and hedge fund industries, which have raised their profile through a series of proposed public offerings and a run of big buyout deals.According to a news release, the hearing will examine “whether existing investor protections are sufficient to protect ordinary investors from new risks, and whether new regulation is necessary.” Mr. Kucinich points out that the recent public offerings will allow mom and pop investors — who would normally be barred from investing in buyout funds and hedge funds — to buy shares in the companies that run these funds.
And he is not alone: Many others in Washington have set their sights on private equity. On the same day as Mr. Kucinich’s hearing, the Senate Finance Committee will hold a hearing on a bill that would raise the tax rate on a major source of income for private equity fund managers.

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