Filed under: KKR, Taxes and regulations, The Carlyle Group, Private equity industry

Private-equity companies are under attack by union groups such as Services Employees International Union (SEIU) due to worries that the weakening economy will motivate private equity companies to encourage portfolio companies to cut jobs and benefits. The Washington Post ran a great piece outlining this.

Rather than strikes and marches, these protesters are using less-conventional tactics:

• Protesters presented a satire in front of Henry Kravis’s Long Island home in which they asked passerbys to give the buyout master a cut on his property taxes.
• At a recent conference in NYC given by Carlyle co-founder, David M. Rubenstein, protesters sneaked in sporting a banner reading “Why does he pay taxes at a lower rate than the hotel’s doorman?”
• In addition to tax shaming, the unions are also pointing to links between Middle Eastern oil money and private equity.

Buyout firms respond by highlighting to the fact they have been responsible managers of their portfolio companies in the past and that unions themselves have actually invested pension fund money in private equity firms. The goal of these unions is for private equity firms to take steps to ensure that employees in their portfolio firms are treated fairly with benefits and job security. Since the movement was initiated, any potential legislation for the benefit of the unions goals has been withdrawn.

The battle of the Haves and the proles continues……

Jon Ogg is a producer and editor of the Special Situation newsletter and the “10 Stocks Under $10″ weekly newsletter for 247Wallst.com.

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Filed under: Ripoffs and Scams, Shopping

Earlier this week, police raided warehouses in New York City and Long Island, seizing over $25 million of counterfeit merchandise. The goods taken by the police included knock-off Nike shoes, Duracell batteries, Louis Vuitton handbags, and more. Two men running these warehouses were arrested, and the machines used to put fake logos on the merchandise were seized too.

These knock-offs are typically sold by street vendors and at flee markets. Are you one of the many Americans who regularly buy fake designer bags, shoes, and more? Does a crackdown like this upset you?

The way I see it, these operations deserve to be shut down. I know that a lot of consumers justify operations like this because they want the designer name without paying the designer price. But the fact remains that the logos and the names are the property of the companies that own the original designs. Others should not be able to profit off their names without paying some fee or royalty to them.

This type of illegal profit might be fun and rewarding to the consumers, but it’s not fair to the companies that have invested money in the brands and the advertising. This isn’t a victimless crime, no matter how you slice it. And I’m glad that the authorities take it seriously and do something to help protect the good names and reputations of the true owners of these brands.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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