State of Greed Seen in Citadel Settlement

Billionaire owned trading firm cheats clients over six year period and is fined peanuts.  FT reported:

The US financial industry regulator has fined Citadel Securities $700,000 for trading ahead of customer orders, dealing a blow to the market-making firm that has benefited from a big rise in retail trading this year. 

Chicago-based Citadel Securities delayed certain equity orders from clients to buy or sell shares while continuing to trade the same stocks in its own account, as part of its market-making activities, Finra said. The claims relate to “over the counter” equity trades, which are carried out away from public stock exchanges and then reported to regulators. 

Over a two-year period until September 2014, the market-maker removed hundreds of thousands of large OTC orders from its automated trading processes, according to Finra. That rendered the orders “inactive” and so they had to be handled manually by human traders. Citadel Securities then “traded for its own account on the same side of the market at prices that would have satisfied the orders,” without immediately filling the inactive orders at the same or better prices as required by Finra rules, the regulator said. 

Nearly half of the 467 limit orders reviewed by the regulator in the six years until September 2018 were found to violate Finra’s requirements to display orders. The bulk of the violations were for failing to execute trades against existing quotations in a timely manner, Finra said.

The regulator also highlighted the ability for traders on Citadel Securities’ OTC desk to “disable” the system component that automatically sent certain messages to trade OTC stocks.

Citadel Securities is majority-owned by Ken Griffin, the billionaire investor, and is the sister firm to Citadel, the hedge fund he runs. The company is the biggest US retail market-maker with a 40 per cent share and has emerged as one of the big winners from the boom in retail investing through the pandemic. 

Citadel Securities will pay a fine of $700,000 under the terms of a settlement with the regulator without admitting or denying the claims. 

Claims? The regulator found direct evidence of frontrunning with Citadel required to make injured traders whole.   As expected news of the settlement did not make Citadel's website.  I took the liberty of adding it.

Some FINRA folks may be in good graces with Citadel as a result of this toothless settlement. Where does that leave the small investor?  I'd like to be more than a prop in Citadel's proprietary trading book.

Update 10-3-21:   Citadel and Robinhood engaged in extremely shady behavior around meme stock trading.  Federal Reserve regional bank chiefs did likewise.

PEUs Bring Back Dividend Recap

After a quarter off private equity underwriters (PEU) brought back their signature debt for dividend move, also known as a dividend recap or liquidity recap.. 

Providence Equity Partners-backed Bite has earmarked roughly 200 million euros ($232 million) from an issue of senior debt to pay shareholders. Around $560 million of proceeds from the loan being sold by Epicor will be used for a payout to KKR & Co.

Sponsors cash mining affiliates should not be a surprise.  The Carlyle Group siphoned off millions from Philadelphia Energy Solutions before it declared bankruptcy (the first time).  Carlyle profited from ManorCare, another affiliate it drove to bankruptcy.  That dividend came in the wake of Carlyle's spinning off ManorCare's facilities to a healthcare REIT. 

How long before Bite or Epicor have financial problems due to sponsor dividend bleeding?  It remains to be seen.

Carlyle Performing Airport Body Temperature Scans

The Carlyle Group's latest product in its COVID-19 portfolio is airport body scanners that detect passengers with fever.

At the Los Angeles International Airport (LAX), thermal cameras are checking airline passengers' body temperatures throughout the Tom Bradley International Terminal and arrival areas.

Thermal imaging cameras detect infrared radiation and can measure the surface temperatures of people.

The LAX screening program is a partnership with the Carlyle Airport Group, through Schneider Electric, which will provide 3 types of cameras to help determine which is most accurate and effective at detecting potentially ill people.

The equipment being tested is on loan at no cost to LAX.

A Carlyle press release stated:

Five separate camera assemblies with units manufactured by Omnisense, Mobotix, Flir and Carlyle-backed HGH are being used in the pilot.

Carlyle could profit by having two affiliates involved, Schneider Electric and HGH Infrared Systems.  What are the odds that HGH wins, given Carlyle family ties?  That's PEU profit layering, on which Carlyle cut its teeth.. 

Carlyle's Airport Group CEO said:

"The pilot is unique in monitoring the entrance to the terminal and testing not just individual cameras, but assemblies of cameras....  the cameras must be able to scan large numbers of persons quickly and continuously while simultaneously identifying individuals that exhibit possible elevated body temperature."

Carlyle affiliates can help screen airports for people with fever (Schneider Electric & HGH), test for COVID antibodies (Ortho Clinical), assist with blood plasma collection (MAK Systems), produce antibody drug conjugate (Piramal Pharma Solutions), ensure the maximum hospital bill for COVID-19 patients (TrustHCS), manufacture Ivermectin treatment (SeQuent Scientific) and make federal coronavirus purchasing something other than a clown show (Unison).

Carlyle plans to profit from, the pandemic as President Trump seems determined to perpetuate it.

Carlyle Co-CEO Youngkin to Step Down for Public Service

Reuters reported:

Carlyle Group Inc said on Tuesday that Glenn Youngkin will step down as co-chief executive to dedicate himself to public service, leaving Kewsong Lee as sole CEO of one of the world's biggest private equity firms.

Lee, who joined Carlyle seven years ago after spending 21 years at private equity firm Warburg Pincus, will become the firm's only CEO when Youngkin leaves at the end of September.

Recall Carlyle made its fortunes in part due to employing former public servants, James A. Baker, Frank Carlucci and George H. W. Bush.  It appears Youngkin wishes to reverse the trend and enter public service on behalf of the Red team.

"As the world continues to face so many challenges today, and as Carlyle is well-positioned, now is a natural point to focus my full-time efforts on community and public service efforts that I believe can make a meaningful impact," Youngkin said in a statement.

Youngkin and his wife Suzanne earlier this year launched VA Ready, a non-profit offering training for unemployed Virginians to help them find work amid the coronavirus pandemic. He has also been a donor mainly to Republican politicians.

If someone wanted to impact unemployment one of the most powerful levers would be as co-CEO of a private equity underwriter (PEU) with thousands of companies under their control.

In 2011 Carlyle Group co-founder William Conway offered $1 billion to groups tackling unemployment.  Did Conway's funds help start VA Ready?  Conway remains co-executive chairman alongside fellow founder David Rubenstein, who said this regarding Youngkin's change.

“He did an outstanding job as co-CEO, but I certainly understand the pull of the kind of public service activities to which Glenn is committed,” Rubenstein said in the statement. 

Former public servant Rubenstein recently told Andy Serwer that people will go back to work, however some will be laid off by their employer.  He also said Americans will become numb to widespread coronavirus deaths.

Maybe Glenn Youngkin's retirement from Carlyle is a truly heartfelt move, but that's hard to believe given Carlyle's 3-D chess manipulation of Uncle Sam's wallet.  It's more likely Glenn became Carlyle's first executive level layoff (while fully supported by Carlyle's billionaire founders).

How long before a publicly funded VA Ready is training employees for free for Carlyle's affiliates?   VA Ready could take public money as employees are let go from Carlyle companies and once again as employees are rehired within the firm's vast portfolio of businesses.  Carlyle could push off lots of people costs onto such a nonprofit.  

Glenn's wife could run the nonprofit while Youngkin is groomed for future public service in Washington, D.C.  It may be the new Carlyle way.  Someone has to keep the green flowing for the PEU boys after Jay Powell and Randall Quarles.  Youngkin could be key.

Update 7-24-20:  Bloomberg reports Youngkin may run for Virginia's Governor, presumably on the Republican ticket..  Youngkin had Carlyle's infrastructure deals which include Terminal One at New York's JFK airport and the Corpus Christi's Harbor Island deep water oil terminal, which Carlyle abruptly abandoned.  Candidate Youngkin should answer questions about Carlyle's shifting infrastructure winds.  Virginia once considered doing a ports deal with The Carlyle Group.  

 

Update 1-31-22:  PND reported "Conway originally had planned to donate $1 billion to create jobs for low-income people, but when he solicited ideas for how to go about it last fall, he received more than twenty-five hundred suggestions. Ultimately, he determined that the greater need was to help the poor qualify for jobs that already existed. "I concluded out of all this that it was extremely difficult to create jobs," Conway said. "The objective I get to is similar, but I never thought I'd actually get there this way."

Rubenstein Says Get Used to Deaths, Go Back to Work

Yahoo Finance reported:

The tradeoff between reopening the country and exacerbating the coronavirus outbreak is “the big problem we have right now in the economy,” says David Rubenstein, a billionaire investor who co-founded the private equity giant Carlyle Group.

Rubenstein predicted that everyday Americans will grow accustomed to heightened levels of sickness and death from the disease as the economy continues to reopen.

“It's going to have a lot of health consequences that we're going to live with and just accept as normal,” he says. “I think people are going to go back to work and tolerate 1,000 people dying a day.”

In 1987, he co-founded a $5 million firm called Carlyle Group that now manages more than $200 billion in assets and runs offices on six continents.

The Carlyle Group recently invested in several companies tackling different aspects of the coronavirus outbreak.

“You have two ships passing in the night,” Rubenstein says. “While there's a desire to reopen, we also see the consequences of reopening.”

“I suspect we're just going to be tolerating more deaths than we normally would,” he says.

Carlyle stands to profit from the pandemic's proliferation.  Carlyle affiliates can help test for COVID antibodies (Ortho Clinical), assist with blood plasma collection (MAK Systems), produce antibody drug conjugate (Piramal Pharma Solutions), ensure the maximum hospital bill for COVID-19 patients (TrustHCS), make Ivermectin treatment (SeQuent Scientific) and make federal coronavirus purchasing something other than a carnival show (Unison).

Another ship on the sea is America's healthcare system.  Rubenstein's back to work solution means more people mixing, more opportunity for the highly transmissible COVID-19 virus to propagate.  More interaction, more cases.  More cases, more profits for Carlyle from its COVID-19 stable.

He did say more government funds for businesses will be coming, as well as layoffs.  How might Rubenstein's philanthropy help widespread suffering from unemployment or income inequality, which he said is worse than it has ever been?  Andy Serwer asled the question.  Rubenstein said nonprofits would need to change their business models, via consolidations and fewer offerings.  The billionaire did not say he would put his vast resources to solving the plight of people/blight from our economic implosion.

We know he doesn't want to pay more in taxes.  Rubenstein's track record is clear in that regard.

Update 7-21-20:  Serwer failed to ask the most basic question:  How does Carlyle plan to profit from COVID-19?  Carlyle co-CEO Glenn Youngkin plans to step down in September.  The news piece stated:  "Across the private equity industry, asset managers are trying to assure investors that their portfolios are not only well-positioned to ride through the economic carnage inflicted by Covid-19, but that they can capitalize on opportunities that might arise during the turmoil.

Update 8-11-20:   Republicans in Congress agree with Mr. Rubenstein that people should go back to work. 

Subsidized Billionaire Family Offices Make Profitable Bets

Billionaires took private and forgive-able public loans in March.  Private loans enabled market beating returns on their wealth while public money subsidized operations in some firms.  Reuters reported:

Billionaires looked after by Swiss bank UBS (UBSG.S) are looking to move some of their cash out of equities after profiting from an unprecedented sell-off and rapid rebound from March to May, the world’s largest wealth manager said on Thursday. 

During the rout in stock markets across the globe in March, UBS’ richest customers took out loans to place billions into crashing stock markets. They are now looking to pull that money from equities and put the profits in illiquid and private assets, UBS’ head of global family offices told Reuters. 

Their strategy has helped family offices which manage the financial affairs of the world’s richest beat hedge funds and overall markets to outperform their target benchmarks through May, according to the bank’s survey of 120 family offices, with an average family wealth of $1.6 billion, published on Thursday.

Some high return family offices took Paycheck Protection Program funds.  Reuters reported:

Private investment firms that manage the fortunes of wealthy individuals and their kin were approved for millions of dollars in taxpayer-funded relief loans designed to help small businesses weather the coronavirus lockdown.

The companies - often referred to as “family offices” - approved for the forgivable loans from the Small Business Administration (SBA) included those that oversee money for the family that co-owns the National Basketball Association’s Sacramento Kings; the former manager of a multi-billion dollar hedge fund firm; and a serial Las Vegas entrepreneur.  

About 2,000 firms that manage money or advise on investments, such as hedge funds or wealth advisers were approved for loans meant to shore up payroll and rent costs for small companies.

The SBA said in a report, finance and insurance firms represented $12.2 billion across 168,462 loans, about 2.3% of the program’s total lending as of June 30.

So the Trump team pushed millions out the door to people with the wherewithal to borrow huge amounts.  Many founding private equity underwriters (PEU) formed family offices with the vast wealth.  It's not clear if any of these offices took forgivable PPP loans while making big bets on equities.

Some recipients include:

Rothschild Capital Partners LLC, a New York-based firm that manages money for its chief executive, David D. Rothschild and others, got the go-ahead for a loan of up to $350,000 to retain eight jobs. The firm managed approximately $330 million at the end of 2019 on behalf of the Rothschild family and a group of wealthy investors, according to public filings.  Representatives for Rothschild did not respond to requests for comment.

The family office of former high-profile hedge fund manager Jacob Gottlieb, New York-based Altium Capital Management LP, was also approved for up to $350,000 to retain eight jobs, according to the disclosure. Gottlieb until recently ran the approximately $8 billion Visium Asset Management before it shut down amid a financial fraud scandal

Carlyle's SeQuent Makes COVID Medication Ivermectin

In early May I questioned how The Carlyle Group would profit from its planned purchase of veterinary medicine maker SeQuent Scientfic in the midst of a global pandemic.  It turns out one Sequent medicine is under study for COVID-19 treatment and early studies show positive results.

A 40% reduction in mortality is a significant and welcome development.

Carlyle affiliates can help test for COVID antibodies (Ortho Clinical), assist with blood plasma collection (MAK Systems), produce antibody drug conjugate (Piramal Pharma Solutions), ensure the maximum hospital bill for COVID-19 patients (TrustHCS) and make federal coronavirus purchasing something other than a carnival show (Unison).  Add Ivermectin treatment (SeQuent Scientific) to Carlyle's COVID-19 portfolio.

More disease, more demand.  . Could The White House's bumbling public health response make Carlyle's billionaires richer?  Highly likely.

Update 8-16-20:  India recently made Ivermectin the preferred treatment for COVID-19 vs. Hydroxychloroquine.

Carlyle Piles Back into Unison

The Carlyle Group cut its teeth with companies serving Uncle Sam and recently invested in such a firm.

Carlyle's press release stated:

Unison (www.unisonglobal.com), a leading provider of procurement, supply chain, and contract management software to Federal government agencies and government contractors, today announced it has been acquired by global investment firm The Carlyle Group (NASDAQ: CG), and Unison management. Terms of the transaction were not disclosed. Carlyle previously owned the business from 2005 to 2010. 

Unison’s solutions help government agencies and contractors navigate the complex rules and compliance requirements of procurement and grants, program management and contract lifecycle management..

Contracting became an issue during the coronavirus outbreak in the Northeast and appears to be an issue as widespread outbreaks occur in southern and western states.  Did Carlyle buy back into Unison after watching Kushner's slim suit crowd stumble and fall in coronavirus procurement?

Vanity Fair reported:

“We’re on the other side of the medical aspect of this and I think that we’ve achieved all of the different milestones that are needed,” Kushner said last month. “The federal government rose to the challenge.”

But behind the scenes of that so-called “extraordinary” work by the Trump administration, things have seemed far less rosy. According to news reports and a recent whistleblower complaint, Kushner’s crack squad of young private sector volunteers—hailing from venture capital, private equity and consulting firms—has been beset by crippling incompetence and political cronyism, exacerbating the federal government’s gross mismanagement of the coronavirus crisis that has killed more than 70,000 in the United States. 

“Americans are facing a crisis of tragic proportions and there is an urgent need for an effective, efficient and bold response,” a member of Kushner’s team said in a whistleblower report sent to the House Oversight Committee on April 8, and which was obtained by the Washington Post. “From my few weeks as a volunteer, I believe we are falling short.”

According to the whistleblower, volunteers on Kushner’s team often lacked relevant qualifications to help get necessary resources to hospitals fighting the COVID crisis, with team members who didn’t have sufficient “health care, procurement, or supply-chain operations” experience assigned to help obtain and direct supplies to medical workers.

As the volunteer on Kushner’s team wrote in the April complaint, “These problems affect the entire chain of command, hamper our ability to respond and could result in many Americans losing their lives.”

The virus has now killed more than 135,000. The U.S. Department of Health and Human Services currently uses Unison purchasing software according to the company's website.

Leading acquisition professionals in all 15 cabinet level agencies rely on Unison’s Acquisition suite.

Uncle Sam gave billions in grants to the wealthy and politically connected.  A number of private equity underwriters (PEU) received federal subsidies via affiliates, supposedly not allowed by law.  Will Unison play a role in forgiving billions in federal funds that went to the right people in the wrong companies?

Let's hope Unison can get testing supplies, PPE and contact tracers to communities in need ASAP.

Update 7-13-20:  Right people includes billionaire family offices. 

Update 7-12-22:  Carlyle will sell a majority stake in Unison to Madison Dearborn Parnters

PPP Goes to Banned PEU

Private equity scored big subsidies via the CARES Act and Uncle Sam's largesse.  Bloomberg, Dealbreaker and CNBC wrote piece on public funds bailing out billionaires and private equity underwriters (PEU), supposedly banned from getting public money.

It's enough to make one throw their hands in the air, which one author recently did. In his farewell post Michael Kreiger wrote about exposing financial feudalism, which he characterized:

"(Financial feudalism) systematically and intentionally enriches certain small segments of the populace while enslaving the masses via perpetual colossal debt issuance coupled with reoccurring central bank bailouts for the creditor and financial asset speculator class" 

Is it a last ditch money grab by the greed and leverage boys before they implode under the weight of a global pandemic and an awakening underclass?  They believe not.  The PEU boys know there's alot more money for them to grab, courtesy of Uncle Sam's wallet.

Politicians Red and Blue love PEU.  That isn't you.

KKR to Get AUM Boost from Global Atlantic

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FT reported:: 

KKR has agreed to buy Global Atlantic, the former life insurance unit of Goldman Sachs, in a $4.4bn deal that underscores how private equity firms are taking over the role of traditional financial institutions as lenders to millions of ordinary American households and businesses. The buyout group is using its own balance sheet to fund the deal, which will boost KKR's assets under management by a third, to $279bn.

Global Atlantic has significant liabilities.  Shouldn't they add to KKR's LUM (liabilities under management)? 

Private equity owning insurance companies and steering affiliate cash into parent investments is hardly an arm's length transaction.  The Carlyle Group recently bought over 50% of Fortitude Re and can make capital calls on its affiliate.

Insurance regulators need to watch the myriad of ways PEU ownership will harm clients, deal fees, management fees and special dividends/distributions (most debt funded).  

Update 9-27-21:  ZeroHedge and WSJ noticed the pattern of PEU's buying life insurance portfolios.

Update 6-29-23: Investor Kirk Simon called out the PEU boys buying insurance companies and steering insurance reserves into their PEU offerings.

The whole private equity thing of buying up life insurance companies then investing the premiums just seems a bit sketchy.

I'll shorten it to the whole private equity thing seems a bit sketchy.

Celebrating Equality in Time of Massive Inequality, Rubenstein Style

Carlyle Group co-founder David Rubenstein's July 4th message encouraged citizens to look at our nation's founding principles as aspirational goals.

And we should resolve that in celebrating the Fourth of July and the Declaration, we are really celebrating where the country should be heading – where everyone can feel and be equal in rights and opportunities – and hopefully will arrive someday soon.

Mr. Rubenstein had the right to meet with Presidents.  Most citizens have not.  Carlyle lobbied for and kept preferred carried interest taxation for over a decade.  Rubenstein's calls are answered personally by sponsored politicians.  His will makes it into federal policy and law.  Citizens wanting the wealthy to pay more taxes or have healthcare be more affordable and less complex are ignored.

We should all have the opportunity to have employed the Chairman of the Federal Reserve and be bailed out with trillions in economic programs.   Instead many citizens worked for private equity affiliates and experienced the kind of massive upheaval that prioritizes interest payments, management fees and sponsor dividends over taxes, wage increases and benefit improvements.

Rubenstein knows Jefferson the idealist was different from Jefferson the industrialist.  The Smithsonian wrote:

It had long been accepted that slaves could be seized for debt, but Jefferson turned this around when he used slaves as collateral for a very large loan taken out in 1796 from a Dutch banking house in order to rebuild Monticello.  He pioneered the monetizing of slaves, just as he pioneered the industrialization and diversification of slavery.

Jefferson declined proceeds from his friend's estate that would've provided funds to free his slaves. Instead he used slaves as collateral on a very large loan.  The Smithsonian piece makes it clear Jefferson's actions were his choice:

A letter has recently come to light describing how Monticello’s young black boys, “the small ones,” age 10, 11 or 12, were whipped to get them to work in Jefferson’s nail factory, whose profits paid the mansion’s grocery bills.

So on July 4th know Thomas Jefferson was a PEU founding father.  That's my interpretation of history, Mr. Rubenstein.

Update 7-5-20:  NYT ran a piece citing the evils of private equity. "In pursuit of maximum returns, such firms have squeezed businesses for every last drop of profit, cutting jobs, pensions and salaries where possible."  The author cited the private equity tax loophole, carried interest.  Foreign Policy had this to say about the PEU boys, "close the loopholes in tax and regulatory law that allow private equity companies to function as predators on the real economy."  Matt Stoller wrote "corporate America fell into disrepair as private equity funds cut much more than fat, carving deeply into bone and muscle."

Update 7-7-20:  A descendant of Thomas Jefferson called for the Jefferson Memorial to be replaced. Frederick Douglas spoke these words in 1852, “To side with the right, against the wrong, with the weak against the strong, and with the oppressed against the oppressor! Here lies the merit, and the one which, of all others, seems unfashionable in our day.”

Update 7-11-20:  "Companies have been stiffing employees, a dynamic that’s getting worse decade after decade, which is tearing our country apart."  Chris Martenson added:  "Wall Street’s mighty siphons assure that nearly all of the Fed’s freshly printed money goes straight into the pockets of the most well-connected players."

Update 5-5-22:  The PEU "public pension savior" narrative may burst if one New York Assemblyman gets his wish for PEUs to reveal their contracts and fee arrangements with New York's public pension funds. 

TPG's Slippery Pre-bankruptcy Move for Cirque du Soleil

Canada’s Cirque du Soleil Entertainment Group filed for bankruptcy protection on Monday, June 29, 2020.  NYPost reported:

On March 30, the entertainment company, which boasts TPG as its controlling shareholder, moved the majority of its worldwide trademarks to a brand-new entity, a senior lender told The Post. The next day, the Montreal-based company — known globally for its flashy acrobatic and aerial acts — missed an interest payment on its $900 million senior debt, setting the stage for its bankruptcy, according to reports and sources.

What value did those worldwide trademarks have when lenders made their original deal with TPG and Cirque du Soleil?

TPG, run by billionaires David Bonderman and James Coulter, bought Cirque in a 2015 deal that valued the entertainment giant at $1.5 billion. TPG walked away with a 60-percent stake, Caisse and Fosun took smaller stakes, while Cirque’s accordion-playing, fire-eating co-founder, Guy Laliberte, grabbed 10 percent, which he later sold to Caisse.

The entertainment company, which got its start with a ragtag team of street performers, was loaded down with a towering $1.2 billion in debt in the deal.

Prior PEU pre-bankruptcy moves included paying sponsors a dividend or giving huge management bonuses.  TPG's move is the latest PEU innovation from the greed and leverage boys.

TPG and other Cirque shareholders — including Caisse de Depot et Placement du Quebec, Canada’s second-largest pension fund, and Shanghai-based Fosun International Ltd. — provided Cirque with $50 million in emergency financing.

Instead of issuing the loan to the company at large, they directed it to the new trademark unit, a move that instantly bolstered their status in bankruptcy, sources said.

As mere shareholders, TPG would have been forced to stand behind existing lenders in a bankruptcy. Likewise, if it had loaned the larger company millions, it would have been forced to take a backseat in a bankruptcy, experts said.

While there’s no indication that TPG’s aggressive maneuvering is illegal, lenders say they could contest the transaction in court because it was done at a time when the company knew it was going to default on its existing debt.

“TPG will use the interim financing to advantage themselves” in bankruptcy, the peeved senior lender told The Post. “It’s very aggressive.”

“Greed is what it is,” said a restructuring lawyer familiar with the issues but not working on the case, who questioned the shareholders’ “right to transfer an asset away from lenders right on the verge of bankruptcy.”

These people are the recipients of  trillions in Federal Reserve support.  Bloomberg reported on April 15th:

The Montreal-based company is discussing a $50 million loan secured by Canadian intellectual-property assets, according to people familiar with the matter. The borrowing would give the company time to explore options including potential government assistance.

Bloomberg noted PEU fear of the public learning private equity affiliates received federal support via  the myriad of federal programs:

After the government broadly excluded private equity firms from the program, dozens found ways to steer around the restrictions, often adjusting governance or ownership arrangements with portfolio companies in sectors including entertainment, fitness, sports and dermatology, the people said, asking not to be named discussing confidential arrangements.

What’s more, some portfolio companies also benefited from indirect taxpayer support after helping scores of related businesses apply for PPP loans, keeping revenue flowing, the people said.

The industry’s secret success in tapping SBA money risks stoking a new uproar in Washington. 

Did Cirque du Soleil get any government assistance after laying off 4,679 employees by video and informing them they have no health insurance via e-mail?

TPG's shifting Cirque du Soleil assets to a newly created entity and making a loan to that entity is hardly an arm's length arrangement, given TPG's 60 percent ownership.  That $50 million loan should give TPG a minor equity stake in Cirque post bankruptcy.

The PEU boys fear public backlash from their taking massive government grants and/or loans.  Why should billionaires fear the common man learning of their ramped up financial support from Uncle Sam?   Because many of us have worked for one of their portfolio companies.  Consider this Cirque du Soleil employee's experience:

Been a technician on a Vegas Cirque show for 15 years.

It was great early on. Back when the company actually cared about performers and staff. They did their best to try to make it actually feel like a family. There were maybe 10 shows max at the time, that they focused on and really paid attention to quality and morale. That’s how the company made billions of dollars.

The company started expanding, getting into various industries that had nothing to do with the shows. Or doing shows that didn’t really fit with what Cirque was known for and good at. Those experiments failed and the company suffered. Every year when upper management would go around to all the shows, we would hear an assurance that the company was going to go back to focusing on the shows. And then it didn’t happen. Again and again. Pay for technicians fell more and more behind market rate. It didn’t even keep up with inflation.

Then Guy sold off Cirque to investment companies. Everything started nose-diving. Budgets for the top-selling shows were cut by 20%, 40%, 60%. We did our best to keep up the shows, but quality went down. Performers were cut. Technicians were cut. Safety was cut. It’s amazing that no equipment had major failures.

The fight begins for control of Cirque du Soleil post bankruptcy.  Axios reported:

Cirque's existing private equity owners, including TPG Capital, offered a reorganization plan whereby they'd retain a 55% equity stake. 

Lenders giving up $900 million in debt is only worth a 45% stake?  That makes TPG's pre-bankruptcy move even stinkier if a $50 million loan gets them 55% of a reorganized Cirque

The greed and leverage boys will continue their PEU ways as long as politicians Red and Blue love PEU.