Brendan Ballou is the author of Plunder: Private Equity’s Plan to Pillage America. Brendan is also a federal prosecutor, and served as special counsel for private equity in the antitrust division at the Department of Justice. (Although, he will be the first to tell you, the book does not reflect the views of the DOJ.)

Now, the idea behind private equity or PE is simple: a private equity firm gathers up a bunch of cash, raises some investor cash, and takes on a lot of debt to buy various companies, often taking them off the public stock market. Then, they usually install new management and embark on aggressive cost cutting and turnaround programs mostly because they have to pay down all that debt pretty fast. The company can then be sold or taken public again for a hefty profit. But don’t worry — if it doesn’t work out, the PE firms are extracting fees at every step of the process, so they get paid no matter what happens. READ MORE