Private equity is going after life insurance

I am so sick of seeing shit like this about private equity. But it is the inescapable present reality.

Private equity firms continue to stalk insurance company takeovers and critics say the potential for a financial disaster grows along with that trend.

Americans for Financial Reform, a Washington, D.C.-based nonprofit group that advocates for stronger regulation of Wall Street firms, is the latest group to raise alarm bells on what it deems to be risky private equity investment of policyholder funds.

AFR's new study grew out of its analysis of the relationship between private equity and public pension funds, said Andrew Park, senior policy analyst for the group. The PE impact on pensions is now understood, he explained.

"What has been less understood is how much of this new capital that private equity is getting is coming from the acquisition of insurance companies, and then in turn, insurance companies buying up a lot of the assets that private equity tends to originate," he added. "It's almost like you have this circular financing scheme that has been created now with private equity and insurance."

By the second half of 2023, private equity firms owned $774 billion in life insurance assets, or 9% percent of the life insurance industry, according to the AM Best insurance analyst. Likewise, PE firms are estimated to manage $5.7 trillion in global assets, giving these firms ample ability to buy up even more insurance companies, AFR noted.

The AFR report, Risky Business: Private Equity’s Life Insurance Gambit, comes amid growing pressure on private equity firms to submit to stronger oversight. Over the past month, the Financial Stability Oversight Council and the International Monetary Fund both released their own reports questioning private-equity control of insurers. - Insurance News Net

The FTC is trying to deal with some of Big Tech's crap

As best they can, with Congress doing nothing.

The Federal Trade Commission Act only gives the agency the authority to regulate “unfair or deceptive” business practices. For years, privacy experts assumed that meant consumers were out of luck: as long as companies weren’t telling outright lies, they were free to do as they pleased with your data. The FTC reached a $5 billion privacy sentiment with Facebook in 2018, but the case hinged on ways the company misled users — rather than allegations that the unpleasant ways Facebook used data were inherently unlawful.

But under the leadership of Lina Khan, the Biden-appointed FTC chairperson, the commission has taken up data misconduct with unprecedented vigor.

The FTC does have some rule making authority, but it’s a slow, arduous process. In the meantime, it is changing tech policy by stretching existing regulations to places no one believed they could go. - Gizmodo

House-flippers need far tighter regulation

At a minimum, legitimate licensing and reporting. And maybe it would be better if governing agencies had more direct involvement in dealing with problem properties.

Unlike real estate agents, house flippers operate in a largely unregulated space. Real estate agents have a fiduciary responsibility to represent a homeowner’s best interests in negotiations, which is defined in state laws, licensing requirements and an industry code of ethics. But in most states, flippers don’t need a license.

HomeVestors, the self-proclaimed “largest homebuyer in the United States,” goes to great lengths to distinguish itself from the hedge funds and YouTube gurus that have taken over large swaths of the real estate investment market. The company says it helps homeowners out of jams — ugly houses and ugly situations — improving lives and communities by taking on properties no one else would buy. Part of that mission is a promise not to take advantage of anyone who doesn’t understand the true value of their home, even as franchisees pursue rock-bottom prices...

But a ProPublica investigation — based on court documents, property records, company training materials and interviews with 48 former franchise owners and dozens of homeowners who have sold to its franchises — found HomeVestors franchisees that used deception and targeted the elderly, infirm and those so close to poverty that they feared homelessness would be a consequence of selling. - ProPublica

Regulators are preventing a crypto-fueled economic meltdown

I'd prefer to see the stuff just banned, already. But what's going on is righteous, especially if you think about what would be happening with right-wingers in charge.

The implosion of what’s been unmasked as a criminal enterprise at FTX has created a chain reaction, where lost faith, pullbacks on trading volume, and potentially similar schemes at FTX competitors are devastating the nascent asset class. It should reinforce the fact that the government’s success in keeping crypto out of the broader financial system was the most important regulatory action of the past decade. We rarely give enough credit to agencies that prevent something from happening; it’s hard to prove a negative, as they say. But if we manage to get out of this cycle without a recession, we will have the banking regulators, primarily Gary Gensler at the Securities and Exchange Commission, to thank...

Hedge funds that have done business with Binance are receiving subpoenas related to federal investigations around compliance with anti–money laundering laws. Meanwhile, the SEC, along with securities regulators in Texas, has filed objections to Binance’s acquisition of assets from a bankrupt lender named Voyager Digital.

Perhaps the most important move by the banking regulators did not involve a specific crypto firm or token. The Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (in early January) issued a joint statement that essentially told large banks to rethink any inkling of holding crypto assets in their portfolios. After detailing the numerous risks from crypto—including fraud and scams, misrepresentations and poor risk management from crypto companies, high volatility, legal uncertainties, and the potential for digital versions of old-time bank runs—the regulators stated: “It is important that risks related to the crypto-asset sector that cannot be mitigated or controlled do not migrate to the banking system.”

While the joint statement went on to say that banks aren’t legally prohibited or discouraged from providing any permitted services to customers, you didn’t have to read between the lines to get the regulators’ point. They don’t want to see major banks investing in a bunch of crypto at this point, and they will be watching closely any transactions of that type. “Issuing or holding as principal crypto-assets … is highly likely to be inconsistent with safe and sound banking practices,” the regulators wrote. - The American Prospect

Emmer and colleagues play mega-CYA on crypto

I despise cryptocurrencies and I think they should be banned. But I'm not in charge of such matters, nor am I ever likely to be. Anyway:

Nearly nine months after a bipartisan group of U.S. House members sent a letter questioning the Securities and Exchange Commission’s investigation into cryptocurrencies, including the failed FTX exchange, the lawmakers are maintaining their position that the agency’s approach to regulating crypto is deeply flawed.

In public comments since FTX’s collapse last month, the congressmen, led by Minnesota Republican Tom Emmer, have largely called FTX’s demise a singular issue that deserves scrutiny.

They argue the episode only reinforces their point that the SEC’s regulation of cryptocurrencies is arbitrary and ineffective.

FTX co-CEO Ryan Salame was a major campaign contributor to the Congressional Leadership Fund, the political action committee Emmer controlled as the head of the House Republican campaign arm in the 2022 election cycle. - Minnesota Reformer

Coal ash rules are being dangerously flouted

I don't know what it's going to have to take, for real enforcement to happen.

More than nine out of 10 coal ash impoundments nationwide are contaminating groundwater in violation of federal rules, according to environmental groups’ comprehensive analysis of the latest industry-reported data.

Even as the U.S. Environmental Protection Agency has stepped up enforcement of federal coal ash rules this year, the groups say more urgent action is necessary, including mandates that companies test all drinking water wells within a half-mile of coal ash impoundments, and that companies cease storing coal ash in contact with groundwater.

Coal ash contains arsenic, mercury and other toxins that have been linked to a range of health impacts. And drinking water wells near coal plants, unlike municipal water systems, do not typically undergo regular testing. - Energy News Network

Many questions about pipeline company "security" practices

This only briefly touches on Minnesota. But it is an essential overview.

The Virginia allegations against Leighton highlight how inconsistently states regulate and monitor private security firms that cater to the fossil fuel industry. Potential penalties are seldom hefty enough to deter companies that have been caught violating licensing regulations in one state from skirting licensing requirements in another. Many substantiated complaints are never prosecuted by state authorities.

“Presently, there is no universal manner in which security companies and their individual security practitioners are handled from state to state,” said Fabian Blache III, the director of Louisiana’s private security licensing board, and president of the International Association of Security and Investigative Regulators (IASIR). “When you have the ones that just blatantly work without a license and you’re constantly chasing them around from place to place to place, it’s very frustrating.” - DeSmog

Will Big Tech be held to account?

I don't consider the likes of Facebook and Twitter to be intrinsically bad things. But those currently running them need some attitude adjustments. Or to be replaced.

With the CEOs of Twitter, Google, and Facebook (having testified) Thursday on the role social media plays in promoting the kinds of misinformation and far-right extremism that sparked the deadly Capitol attack, anti-monopoly experts are urging members of Congress not to allow the executives to divert attention away from their fundamentally nefarious business model that thrives on the spread of dangerous lies...

"It's no shocker that Facebook failed to tell us about how its technology is being used to manipulate voters and spread harmful misinformation. How many times are we going to be fooled by these profit-hungry monopolies before Congress finally acts?" said Ruby-Sachs. "Letting Facebook decide how it should be regulated is like letting a criminal decide their own sentence." - Common Dreams