The Market Ticker – Is Private Equity Effectively The Mob?

Oh my, I wonder why this was originally filed under seal?

This action challenges a market allocation and big-rigging conspiracy that violates Section 1 of the Sherman Act, 15 U.S.C. §1. Plaintiffs are former shareholders of certain public companies who sold their shares to the Defendant private equity firms in large leveraged buyouts (“LBOs”) announced between 2003 and 2007 (“the Conspiratorial Era”). Rather than compete, Defendants agreed to work together to allocate deal outcomes and purchase the target companies at artificially-suppressed prices, depriving shareholders of billions of dollars.

And so it continues, all 221 pages of it, outlining allegations of lawbreaking that include effective bid rigging and conspiracy between the defendant private equity shops, with Bain as one of the named defendants.

Some of the plaintiffs include public retirement funds, such as the City of Detroit’s Police and Fire Retirement System, along with several individuals.

The defendant list is long and distinguished, including Bain, Blackstone, Carlyle, Apollo, Goldman, JP Morgan, KKR, and more.

This has received very little press, and in fact the filing was attempted to be suppressed entirely, as it was originally filed under seal. It appears that a judge was having none of that, however, and now we can read the entire litany of alleged conspiracy and abuse, including allegations of explicit agreements not to compete with one another on deals.

The allegations, if true, are an outrage. This sort of activity isn’t “like” The Mob, it is The Mob!

I will be watching this one going forward.

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Copy of the complaint below…