A new report by the US Government Accountability Office finds that the US has used taxpayers money to fund private Wall Street hedge funds to help the financial industry.
The report released on Thursday found that while the funds are not legally obligated to pay back the money to the public, they do have the right to use the funds to make short-term investments to raise money to finance their investments.
The GAO found that some of these hedge funds, called ‘short-term investment vehicles,’ use their own funds to buy up large chunks of stocks and sell them to hedge funds for a profit.
They also use the money they get to pay dividends to themselves.
The Wall Street Journal reports that the GAO report was based on a separate investigation by the Securities and Exchange Commission.
Wall Street is already reeling from the fallout of the collapse of the financial system and a series of large losses by the banks.
The collapse has also put a spotlight on how the Federal Reserve has been handling the economy and how it has used the taxpayer money that it was supposed to be lending to the banking industry.
Read more at the Washington Post