The following is an excerpt from Paul Blumenthal | May 20, 2015 | Huffingtonpost.com |
WASHINGTON — Billionaire activist investors are joining forces to raid Congress for more power.
According to a Wall Street Journal report, hedge fund operators Paul Singer, Carl Icahn, Bill Ackman, Barry Rosenstein and Dan Loeb formed a lobbying trade group called the Council for Investor Rights and Corporate Accountability, or CIRCA. The new group will push back against recent efforts to reform rules allowing activist shareholders, like the group’s founders, to raid companies to maximize shareholder profit, often at the expense of workers’ jobs. It comes at the same time hedge funds are waging under-the-radar lobbying battles on issues in which they have investments, like Puerto Rican debt and Fannie Mae, to increase their profits.
Activist investors like Icahn, Ackman and Loeb are known for using their funds to invest in companies that they believe could be producing more value for shareholders. They use those investments to secure board seats and then press for changes that often include merging with competitors, selling off parts of the company, pushing up the price of drugs, moving production overseas and, in many cases, firing large numbers of workers.
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