Private Equity Insider Takes Issue With Transaction Fees

SNL Financial
December 4, 2013

Jordan A. Thomas discusses private equity firms collecting transaction fees

"You can't just say we don't like this law, so we're going to blow it off," he said. "In this case, for more than a decade, many of the top private equity firms in the country have systematically ignored this law and in the process procured more than $2 billion in transaction fees."

Thomas, who helped found the SEC's whistleblower program and is a former assistant director at the regulator's asset management unit, contended that he and his client are not taking a position on whether transaction fees are good or bad for investors. The complaint is simply about pushing private equity firms to either register as broker/dealers and allow themselves to be subjected to a more rigorous regulatory regime or abandon this "side business."

"They can make the choice — it's worth doing or it's not worth doing," Thomas added.

"No industry, no business is above the law," he said.