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S5512119th CongressWALLET

Stop Wall Street Looting Act

Sponsored By: Senator Warren, Elizabeth [D-MA]

Introduced

Summary

Would make controlling private funds and their managers jointly liable for target firms' debts and sharply limit post-acquisition capital extraction. It would also narrow bankruptcy safe harbors, extend avoidance lookbacks, and rewrite tax and reporting rules for investment managers.

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  • Families, workers, and communities: Would strengthen protections in insolvency by raising wage and severance priority and treating WARN penalties and back pay as administrative expenses. The wage priority cap would increase to $20,000 per employee.
  • Private funds, managers, and investors: Would impose joint and several liability, void indemnities that shield managers, ban large equity distributions for 4 years after a buyout, and cap certain capital distributions at 10% relative measures.
  • Tax, market, and insolvency rules: Would extend avoidance lookbacks to 15 years for buyout-related transfers, create a new surtax on payments to controlling entities, recharacterize many carried interest gains as ordinary income under a new partnership regime, and force detailed annual SEC reporting on fees, debt, defaults, and political spending.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 1 benefits, 0 costs, 3 mixed.

Stronger strike protections for workers

If enacted, the bill would make it an unfair labor practice to permanently replace workers who strike or to discriminate against them for striking. It would bar lockouts to influence bargaining, forbid coercing employees to attend employer campaign activities, and require employers to keep wages, hours, and terms the same while bargaining continues.

Major tax changes for private funds

If enacted, the bill would rework how investment-manager and carried-interest income is taxed. Many gains tied to investment-services partnership interests would be treated as ordinary income instead of capital gains, with some limited exceptions for qualifying capital interests. The bill would add a surtax on payments from an entity to a controlling entity, change how partnership interests received for services are valued and treated (an automatic 83(b)-type rule unless opted out), and include some investment-service income in self-employment tax. It would also remove qualified REIT dividends from the section 199A deduction and tighten interest-deduction and penalty rules.

More reporting and investor protections

If enacted, the bill would require the SEC to make controlling private funds file annual GAAP reports within one year. Reports would cover fees, carried interest, fund debt, defaults and bankruptcies, workforce numbers, political spending over $10,000, climate and human-capital data, and other items. The SEC would also require quarterly Form PF-style reporting within 180 days. Advisers would have to give potential investors detailed historical performance and control information. The bill would treat private funds as plan assets when ERISA plans invest, ban fiduciary-waiver agreements, require disclosure for funds that get public money, expand CDO manager retention rules, and bar willful evasion of the Act.

Tighter rules to stop asset stripping

If enacted, the bill would make private funds and active interest holders jointly liable for a controlled firm’s debts, penalties, WARN claims, and some pension liabilities. It would void target-firm promises to indemnify those funds. After a private-fund change in control, the target could not make most capital payouts for four years and distributions would be capped by a 10% test tied to the firm’s financial obligations. Bankruptcy rules would let trustees challenge transfers tied to a change in control for up to 15 years. Creditors and employees would get stronger tools to recover improper transfers.

Sponsors & CoSponsors

Sponsor

Warren, Elizabeth [D-MA]

MA • D

Cosponsors

  • Sen. Baldwin, Tammy [D-WI]

    WI • D

    Sponsored 9/24/2026

  • Sen. Blumenthal, Richard [D-CT]

    CT • D

    Sponsored 9/24/2026

  • Sen. Markey, Edward J. [D-MA]

    MA • D

    Sponsored 9/24/2026

  • Sen. Merkley, Jeff [D-OR]

    OR • D

    Sponsored 9/24/2026

  • Sen. Sanders, Bernard [I-VT]

    VT • I

    Sponsored 9/24/2026

  • Sen. Smith, Tina [D-MN]

    MN • D

    Sponsored 9/24/2026

Roll Call Votes

No roll call votes available for this bill.

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