Shareholder Spotlight : The Hypocritical Heart of Parnassus Investments LLC

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Parnassus Investments LLC, that San Francisco-based darling of the ESG crowd. These bastards parade as the knights in shining armour of responsible investing – environmental, social, governance, all that feel-good crap – while dipping their hands into the same filthy pots as the rest of Wall Street’s wolves. Founded in 1984 by Jerome Dodson, a guy who built his reputation on shunning sin stocks like tobacco and booze, Parnassus has ballooned to over £37 billion in assets under management. They tout themselves as the ethical alternative, screening out the bad guys and pushing for a better world. Bollocks. Scratch the surface, and it’s a cesspool of scandals, settlements, and soul-selling decisions that scream “profits over principles.” And now, get this: they’re shareholders in Cummins Inc., that diesel-spewing giant fresh off a multi-billion-pound emissions cheating scandal. Is this just another cog in the Cummins machine, where ethics are as optional as a emissions filter? You bet your arse it is – a long line of polluters and fraudsters that Parnassus happily beds down with, all while preaching sustainability from their ivory tower.

The Early Days: SEC Slaps and Valuation Voodoo

Parnassus didn’t start clean; they were born in the muck. Back in 1997, the US Securities and Exchange Commission came down like a hammer on Dodson and his crew for overvaluing shares in a defunct company, inflating their fund’s net asset value and screwing investors out of accurate info. It was a classic case of fiduciary fuckery – technical violations, they called it, but let’s call it what it is: greed disguised as oversight. They settled without admitting guilt, paying fines that were pocket change compared to the trust they shattered. Fast forward to 2001, and the SEC was back, charging Parnassus, Dodson, and employees Marilyn Chou and Anthony Nicks with aiding and abetting securities law breaches. Improper disclosures, brokerage arrangements that stank of conflicts – the whole shebang. Again, a settlement, no admissions, just a quiet payout and a promise to behave. These weren’t one-offs; they were the foundation. By 2006, Parnassus was tangled in broader mutual fund litigation over advisory fees, part of an industry-wide rent-seeking racket that prioritised managers’ pockets over punters’ returns. Dodson positioned himself as the anti-Citigroup crusader, slamming big banks for using funds as dumping grounds. Hypocrite much? His own shop was knee-deep in the same ethical quicksand.

Wells Fargo: Betting on Bankster Redemption While the World Burns

Ah, Wells Fargo – the poster child for corporate sleaze. In 2016, the bank exploded in a fake-accounts scandal: employees forging millions of unauthorised accounts to hit sales targets, ripping off customers and tanking the stock by 10%. Fines flew, execs feigned shock, and the public bayed for blood. Enter Parnassus, the self-proclaimed ESG warriors, who decided this was the perfect time to load up on Wells shares. CEO Ben Allen and his team justified it as a “long-term improvement” play, betting the bank would reform under pressure. Bollocks. They held a whopping 4% stake in their Core Equity Fund by 2017, even as shareholders screamed betrayal. “We’re engaging,” they said, “pushing for board accountability.” Engaging? More like enabling. As the Dakota Access Pipeline controversy raged – Wells funding a project that trampled indigenous rights and threatened water supplies – Parnassus clung on, only dumping the stock in 2018 after more scandals piled up. Too little, too late. Investors fled, complaints poured in, and Parnassus’s reputation took a hit. But hey, the bet paid off financially in the short term. Principles? Those are for the brochures.

This wasn’t just a blip; it exposed the rot. Parnassus talks a big game on social justice – issuing statements condemning violence against Asian Americans in 2021, or pollution’s impact on marginalised communities. Yet they invest in the very bastards perpetuating it. It’s like a chef preaching farm-to-table while sourcing from factory farms – pure, unadulterated wankery.

Ditching the Screens: From ESG Purists to Greenwashing Gurus

For 40 years, Parnassus swore by exclusionary screens: no fossil fuels, no weapons, no vice. It was their USP, the reason eco-conscious investors flocked to them. Then, in 2024, they announced a pivot – dropping those screens to “engage” with more companies, including oil and gas giants. Suddenly, the doors open to polluters, all in the name of broader sustainability influence. Critics howled: this is greenwashing at its finest, diluting principles amid America’s anti-ESG backlash. With assets swelling to £37 billion, is it coincidence or convenience? The firm frames it as evolution, but it’s regression – a cynical grab for market share as pure ESG funds struggle. They’ve even embraced nuclear energy, reversing a decades-long ban in 2023, calling it “true ESG leadership.” Leadership? More like following the money trail as renewables falter. And let’s not forget the failed 2021 sale to Affiliated Managers Group: shareholders vetoed it, exposing internal rifts and doubts about the firm’s direction. Stability? Ha. It’s a house of cards built on compromised convictions.

The Cummins Connection: Shareholders in Emissions Evil

Speaking of compromises, let’s zero in on Cummins Inc., the engine maker that’s become synonymous with environmental deceit. In late 2023, Cummins got nailed for installing defeat devices on 630,000 Ram trucks from 2013-2019 – software that bypassed emissions controls, spewing excess nitrogen oxides into the air. The fallout? A record £1.3 billion civil penalty, the largest in Clean Air Act history, plus a £1.6 billion total settlement including recalls for 600,000 vehicles. California alone clawed back £140 million to mitigate the damage. Cummins admitted nothing, of course, but the facts are damning: they cheated emissions tests, poisoned the planet, and prioritised profits over public health. This isn’t some minor glitch; it’s Volkswagen-level villainy, part of a diesel scandal ecosystem that’s cost the industry billions and lives through polluted air.

And Parnassus? They’re bloody shareholders. As of the latest 13F filings, they hold over 342,000 shares in Cummins, valued at around £90 million – a 0.26% slice of their portfolio, including stakes in their Value Select ETF where Cummins weighs in at 3.64%. Why? Because despite the scandal, Cummins is “undervalued” or some such bollocks. But question this: is Parnassus just another enabler in the Cummins orbit, where ethical behaviour is an alternative fact? Absolutely. Cummins joins Wells Fargo in Parnassus’s hall of shame – companies with “alternative ideas on ethics,” meaning none at all. They engage, they say, pushing for change. But holding stock props up the share price, funds the fuckery. It’s not investment; it’s complicity. In a world choking on fumes, Parnassus chooses to bankroll the chokers.

The Broader Sham: ESG as a Marketing Mirage

Parnassus isn’t alone in this farce, but they’re the poster boys. The ESG industry is riddled with sham funds – hyped-up vehicles with questionable holdings that exploit investor guilt for fees. Parnassus launched their first ETFs in 2024, riding the wave, but whispers of greenwashing abound. Their own reports admit gaps in ESG screening, like holding firms with environmental red flags. And the fees? Litigation trends show mutual funds like theirs facing suits for excessive charges under the Investment Company Act. No major wins against Parnassus yet, but the scrutiny’s there. Founder Dodson retired rich, the firm soldiered on, but the soul? Sold out. They condemn hate crimes, bank failures, pollution – all while their portfolio tells a different story. It’s gritty, it’s real, and it’s infuriating. Investors deserve better than this performative piety.

In the end, Parnassus is Wall Street in sheep’s clothing: raw ambition wrapped in ethical ribbons. If you’re pouring your pension into them, wake up. The world doesn’t need more hypocrites; it needs real change. Fuck that noise.

Lee Thompson – Founder, The Cummins Accountability Project

Sources

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