New financial regulations may provide more oversight into finances of nursing homes
The New york Times had an article explaining the Obama administration's plan to overhaul financial regulation by subjecting hedge funds and traders of exotic financial instruments to potentially strict new government supervision. Many of these hedge funds and financial instruments own or have a financial stake in numerous nursing homes around the country. It states that the government would have the power to peer into the inner workings of companies that currently escape most federal supervision, and specifically cites "private equity firms like the Carlyle Group."
The Carlyle Group bought out Manor Care a couple of years ago and have created sham L.L.C.s to protect themselves from liability while cutting the budgets of the nursing homes that they own. In fact, two men who worked in the New York State comptroller’s office were arrested recently after it was discovered they took millions of dollars in kickbacks from private equity and hedge funds. David Loglisci, who was the top investment officer of the state’s $122 billion pension fund, along with Henry Morris, who fund-raised for former comptroller Alan Hevesi, were nailed in a 123-count indictment, which included charges of money laundering, securities fraud and bribery. It was discovered that over 20 transactions made by the pension fund involved kickbacks, with five of those coming from the renowned private equity fund The Carlyle Group. Morris, who was released after posting a $1 million cash bail, allegedly received $13 million from The Carlyle Group, from investments that totaled $730 million.
The administration would require that all standardized derivatives be traded through a regulated clearinghouse. Traders would be required to provide documentation on their collateral and borrowings. They would also be subject to new eligibility requirements, and their trading and settlement practices would be subject to new standards.
