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119-hr-10595119th CongressWALLET

Stop Wall Street Looting Act

Sponsored By: Representative Pocan, Mark [D-WI-2]

Introduced

Summary

Limits private equity looting. This bill would create a multi-title framework to curb private funds' control of companies, boost worker and creditor protections in bankruptcy, and recharacterize investment-manager income for tax purposes.

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  • Workers and employees: Raises wage-priority claims in bankruptcy from $10,000 to $20,000 per claimant and removes timing limits. It bars broad capital distributions and certain plant closings or mass layoffs for four years after a change-in-control.
  • Investment managers and investors: Reclassifies carried interest and many investment-management returns as ordinary income or self-employment income under new partnership rules and adds a surtax on certain payments to investment firms.
  • Creditors, public funds, and trustees: Imposes joint and several liability on controlling private funds for portfolio-firm obligations and expands trustee avoidance powers. It forces more disclosure by funds and bars private funds that receive federal or state agency money from making acquisitions or distributions for two years.

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 2 benefits, 2 costs, 2 mixed.

Higher taxes on investment managers

If enacted, the bill would add big new tax rules for investment managers and firms. It would create a surtax on defined investment payments (the surtax equals 100% minus your highest tax rate) for payments after enactment. It would reclassify many manager partnership gains (carried interest and similar allocations) as ordinary income and treat some partnership interest transfers as immediately taxable. The bill would raise accuracy-related penalties to 40% for underpayments tied to these anti-avoidance rules and give Treasury broad rulemaking power to stop avoidance.

Tighter business interest and REIT rules

If enacted, the bill would limit interest deductions for businesses controlled by certain owners. If a controlled taxpayer's year-end debt-to-equity ratio is over 1, a stricter interest-deduction cap would apply and certain real-estate elections would be revoked for that year. The bill would also remove qualified REIT dividends from the pass-through qualified-business-income deduction for tax years after enactment.

New protections for striking workers

If enacted, the bill would strengthen protections for workers who strike. It would make it an unfair labor practice to permanently replace or threaten to replace strikers, bar discrimination against workers who supported strikes, and require employers to maintain current wages, hours, and terms while bargaining continues. Employers could not coerce employees into attending employer political events unrelated to work.

Stronger worker and creditor protections

If enacted, the bill would expand protections for workers and creditors after buyouts and bankruptcies. It would hold controlling private funds jointly and severally liable for many target-firm debts and bar large capital distributions for four years after takeovers, with a 10% cap tied to recent obligations and a protected lookback (the shorter of 15 years or until a public offering). In bankruptcy, severance and certain labor-law claims would get administrative-expense priority, the wage cap for priority claims would rise to $20,000 per person and timing limits would be removed, and courts would face stricter limits on executive retention and incentive pay.

CDO managers must retain credit risk

If enacted, the bill would expand securitizer risk-retention rules to include managers of collateralized debt obligations (CDOs). When a securitizer must retain credit risk for an asset it does not hold, the securitizer would have to keep that risk itself or through a wholly owned affiliate. The change aims to better align incentives and reduce securitization risk.

New disclosure and fiduciary rules for funds

If enacted, the bill would force controlling private funds to file detailed annual GAAP reports to the SEC within one year and require advisers to report all fund investments and loans quarterly on Form PF within 180 days. Private funds that receive federal or state funds would have to publicly disclose amounts received, job impacts, beneficial owners, and CEO-to-median pay ratios and could not make acquisitions or distributions for two years. The bill would also treat private-fund managers as ERISA fiduciaries when plans invest and ban conditioning advice on waiving fiduciary duties. It would make willful evasion of the Act unlawful.

Sponsors & CoSponsors

Sponsor

Pocan, Mark [D-WI-2]

WI • D

Cosponsors

  • Rep. Jayapal, Pramila [D-WA-7]

    WA • D

    Sponsored 9/24/2026

  • Rep. Landsman, Greg [D-OH-1]

    OH • D

    Sponsored 9/24/2026

  • Rep. García, Jesús G. "Chuy" [D-IL-4]

    IL • D

    Sponsored 9/24/2026

  • Del. Norton, Eleanor Holmes [D-DC-At Large]

    DC • D

    Sponsored 9/24/2026

  • Rep. Ocasio-Cortez, Alexandria [D-NY-14]

    NY • D

    Sponsored 9/24/2026

  • Rep. Omar, Ilhan [D-MN-5]

    MN • D

    Sponsored 9/24/2026

  • Rep. Ramirez, Delia C. [D-IL-3]

    IL • D

    Sponsored 9/24/2026

  • Rep. Tlaib, Rashida [D-MI-12]

    MI • D

    Sponsored 9/24/2026

  • Rep. Schakowsky, Janice D. [D-IL-9]

    IL • D

    Sponsored 10/29/2026

Roll Call Votes

No roll call votes available for this bill.

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