Democratic candidate and Massachusetts Sen. Elizabeth Warren unloaded on what she calls private equity firms’ predatory businesses practices Thursday, bringing up a host of issues that frequently run amok when managing their portfolio.

New legislation she’s calling the “Stop Wall Street Looting Act of 2019” would institute a number of new regulations—including publicizing their fees and returns, and being held accountable for their portfolio companies’ illegal activities.

In a statement in which she alluded to the firms being akin to vampires, Warren accused fund managers of being lax on significant responsibilities related to their holding companies. The accusations extended to a lack of stringency on pension obligations, exploiting carried interest loopholes, bringing too much debt upon their portfolio companies, and subsequently being irresponsible with the loans’ respective payment schedules.

She spoke about “legalized looting,” where the funds behave “like vampires—bleeding the company dry and walking away enriched even as the company succumbs.” Consequences of such looting have a dire social impact, “costing thousands of people their jobs, putting valuable companies out of business, and hurting communities across the country.”

Private equity is undoubtedly on the rise, with famous general partners raising continuously higher capital, and large-scale institutional investors like the California Public Employees’ Retirement System (CalPERS) looking to launch their own private equity organization.

The new bill intends to “empower investors like pension funds with better information about the performance and effects of private equity investments and preventing private equity funds from requiring investors to waive their fiduciary obligations.”

It’s part of an overarching plan Warren is pushing as part of her campaign that would mitigate several aspects of the typical private equity model, including modifying tax law “so that private equity firms don’t get sweetheart tax rates on all the debt they put on the companies they buy.” She also wants to mitigate lenders’ ability to make “reckless” loans to portfolio companies over-encumbered in debt.

She asserted that private equity is dangerous for local news providers, citing their operations to “buy papers for cheap, slashing the staff to cut costs, and bleeding the companies with fees and dividends,” oftentimes charting them on a course to insolvency.

CIO touched on these issues regarding private equity returns, amongst others, in a piece blaming inflated returns on the proliferating use of subscription lines of credit.

She claims the disaster isn’t unique to newspapers, and cited a study concluding that private equity firms accounted for approximately 61% of layoffs in the retail sector between 2016 and 2017. “I am tired of big financial firms looting the economy to pad their own pockets while the rest of the economy suffers,” she said.

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Tags: Elizabeth Warren, Private Equity, Stop Wall Street Looting Act, Vampires