reg reform

New Tax on Sales of PE Firms Discovered in Carried Interest Bill

By Zachery Kouwe

Private equity firms picking through the proposed tax hike on carried interest have discovered an alarming provision buried in the legislation that will raise taxes when they sell their firms.

The provision means any founder of a hedge fund, PE firm or venture capital firm who sells shares in the firm, even through an IPO, will be taxed at ordinary income rates as high as 39 percent. Right now, those sales are taxes at capital gains rates of 15 percent. This would obviously hit anyone trying to cash out by selling to another firm or going public.  Continue reading »

  • 26 May 2010 at 4:50 PM

Blanche Lincoln’s Derivatives Provision All But Dead Now

By Zachery Kouwe

Blanche Lincoln’s famed derivatives legislation, which would basically prevent any big bank from ever trading CDS again, has already been chastised by Barney Frank. Now, a senior Treasury official has essentially delivered another blow to the Lincoln legislation.

In a briefing for reporters today, Assistant Treasury Secretary Michael Barr said the derivatives rules were not part of the administration’s four “core objectives” for financial reform. Translation: The Lincoln legislation can die a slow death for all we care. Continue reading »

  • 26 May 2010 at 11:30 AM

Do Hedge Funds Have Chuck Schumer in Their Back Pockets?

By Zachery Kouwe

That’s basically the contention of Washington Examiner columnist Timothy Carney, who pins his thesis on a former Schumer staffer who went on to lobby for the hedge fund and private equity industries.

Three years ago, Sen. Chuck Schumer, D-N.Y., leaned on hedge funds to lobby more. The funds soon hired his banking staffer as a lobbyist. She began raising money for Schumer. Now he’s championing financial regulation that would benefit these hedge funds. “Racket” might be the right word here.

Continue reading »

  • 21 May 2010 at 4:06 PM

Blanche Lincoln Ain’t Backing Down from Derivatives Overhaul

By Zachery Kouwe

Sen. Blanche Lincoln, Arkansas Democrat, was able to push her controversial derivatives amendment into the financial regulatory reform bill yesterday, despite threats from Wall Street. And any banker that thinks Blanche is going to back off derivatives reform after she wins the Arkansas primary runoff on June 8 has no clue how hard-nosed she really is.

“Suggestions that my provisions are the result of the current political climate are completely baseless,” Ms. Lincoln told DealBook. “I am not concerned about politics when Americans are depending on us to ensure that our financial system is secure.”

We’ll see about that. In the meantime, we wonder if Sen. Lincoln is tough enough to do a Dunkaroo – an old Arkansas drinking tradition perfected in Little Rock. Continue reading »

  • 19 May 2010 at 11:12 AM

Volcker Thinks Dodd Bill is Pretty Good

By Zachery Kouwe

Paul Volcker, President Obama’s special advisor on financial regulatory reform, appears to have endorsed the main bill sponsored by Sen. Chris Dodd of Connecticut. Although details are still being worked out, Congress is moving to pass the bill by the end of the month. Continue reading »

  • 18 May 2010 at 1:05 PM

Small Hedge Funds Pained By New Regulations

By Zachery Kouwe

Hedge funds have bounced back in a big way from the financial calamity of 2008, but that hasn’t stopped regulators, especially in Europe, from trying to hit the industry with a bevy of new rules. Continue reading »

  • 14 May 2010 at 11:11 AM

Brickell Continues to Defend OTC Derivatives

By Zachery Kouwe

Mark Brickell has worked for over a decade to keep government regulators out of the over-the-counter derivatives market. He hasn’t given up yet.

The former JPMorgan executive who served as chairman of the International Swaps and Derivatives Assoc., is out today with a piece in the WSJ warning against the dangers of increasing government oversight of OTC derivatives. Swaps did not cause the financial crisis, he says. They are benign contracts that help big companies like McDonald’s hedge its currency risk at a low cost. Continue reading »