U.S. Senator Tammy Baldwin Introduces Bipartisan Legislation to Strengthen Oversight of Predatory Hedge Funds
The Brokaw Act would help protect Main Street from Wall Street hedge funds
WASHINGTON, D.C. – U.S. Senators Tammy Baldwin (D-WI) and David Perdue (R-GA) have introduced the Brokaw Act, bipartisan legislation to increase transparency and strengthen oversight of predatory activist hedge funds.
“This bipartisan legislation updates Depression-era rules to address the financial abuses being carried out by activist hedge funds who promote short-term gains at the expense of workers, taxpayers and local communities,” said Senator Baldwin. “The Brokaw Act will increase transparency and strengthen oversight of predatory hedge funds. These reforms will help rewrite the rules for Wall Street so the playing field works better for our Main Street economy.”
The Brokaw Act is named for a small Wisconsin village that faces insolvency after the actions of an out-of-state activist hedge fund led to the closure of a paper mill that had provided good jobs to the town for over 100 years. The activist hedge fund bought up the legendary Wausau Paper Company, forced out its executives and demanded short-term returns like buybacks at the expense of investments in workers, R&D, and the company’s long-term future.
The Brokaw Act would fight against increasing short-termism in our economy by promoting transparency and strengthening oversight of activist hedge funds. The legislation would put in place the following reforms:
- Restore transparency to the marketplace by shortening the 10-day 13(d) disclosure window to four days.
- Protect businesses from hedge fund “wolf packs” by identifying these coordinated groups of hedge funds as a single group to require disclosure.
- Require derivative disclosure to prevent activist investors from profiting by secretly voting against the company’s interests.
Senator Baldwin has built support for the bipartisan legislation with a broad coalition from business leaders to workers and from investors to financial reform advocates.
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