The regulatory eye in the sky (the SEC) has apparently locked onto private equity firms, sensing valuation problems and conflicts of interest. Generally, private equity firms purchase troubled companies with mostly borrowed funds, cut costs, improve operations, and sell them for a profit, taking a management fee (typically 1.5% to 2.0%) in the interim, plus 15% to 20% of any profits. Private equity firms and how they do business made news recently in the Republican primary presidential debates.