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Wall Street financial hucksters can be downright satanic in their pursuit of killer profits, but here’s one that puts its hellishness right in its name: Cerberus Capital Management. In Greek mythology, “Cerberus” is the name of a 3-headed dog that guards the gates of hell.
This $20 billion dollar private equity outfit found itself in a hell of a fix after the grotesque massacre of 20 school children in Newtown, Connecticut. Cerberus, it turns out, owns controlling interest in Freedom Group, America’s largest firearms maker, which produces the .223 Bushmaster semi-automatic assault rifle used by the murderer at Sandy Hook elementary school.
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The top dog of Cerberus is Stephen Feinberg, a devoted hunter who favors the Remington 700 sniper-style rifle, also made by Freedom Group. Indeed, the NRA has even hailed Feinberg & Co. for supporting gun rights and being “avid hunters and shooters.” Perhaps it’s this personal passion that has kept Feinberg’s moneyfund invested in the gun maker, since Freedom Group keeps losing money – which is not the kind of financial performance that equity investors usually tolerate.
Four days after the horror of Sandy Hook, however, Cerberus punted, announcing that it would sell Freedom Group. Three factors prompted the sale: one, public exposure of its ownership; two, a heighted possibility that Congress will pass an assault weapons ban, thus further-lowering the gun maker’s profits; and, three, pressure from such big clients as the California Teachers Retirement System, which has $750 million invested in Cerberus, including owning a stake in Freedom Group.
What? You can expect equity profiteers to have zero ethical qualms about investing in assault weapons, but why the hell have teachers been letting their pension money finance such a murderous trade?
“Gun Reform Not a Cause On Wall St.” The New York Times, December 18, 2012.
“Companies retreat from rifles used in shooting at elementary school,” Austin American Statesman,” December 20, 2012.
“Connecticut shooter used heavy-duty weapons registered to his mother to kill her and 25 others.” www.nydailynews.com, December 14, 2012.