NEW YORK (The Blaze/AP) — The private equity firm Cerberus will sell its stake in a firearms company that produced one of the weapons believed to have been used in the shootings at an elementary school in Newtown, Conn., calling it a “watershed event” in the national debate on gun control.
While saying that it’s not its role to take positions or attempt to shape or influence the gun control debate, Cerberus said it is taking what action it can by selling its stake in the Freedom Group, which makes the Bushmaster rifle.
On Friday, 20 children were killed, 26 people in all, at Sandy Hook Elementary School in one of the worst mass shootings in U.S history. The gunman, Adam Lanza, is believed to have used a .223-caliber Bushmaster AR-15 rifle in the attack.
The AR-15 is a civilian version of the military’s M-16. Versions of the AR-15 were outlawed in the U.S. under the 1994 assault weapons ban. That law expired in 2004, and Congress failed to renew it under immense pressure from the gun lobby.
Cerberus, however, is distancing itself.
“We are investors, not statesmen or policy makers,” the company said in a statement. “Our role is to make investments on behalf of our clients who are comprised of the pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals. It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators.”
And it appeared some investors were ridding themselves of shares in firearms makers this week. Shares of Sturm, Ruger & Co. plunged nearly 7 percent in early trading Tuesdsay. Shares of Smith & Wesson Holding Corp. fell more than 9 percent.
But that’s in stark contrast to firearms sales, which have seen a spike since the shooting. Foxnews.com offers some examples:
- The Colorado Bureau of Investigation says it set a new record for single-day background check submittals this past weekend.
- In San Diego, Northwest Armory gun store owner Karl Durkheimer said Saturday “was the biggest day we’ve seen in 20 years. Sunday will probably eclipse that.”
- In southwest Ohio, from dawn to dusk a Cincinnati gun show had a line of 400 waiting to get in, said Joe Eaton of the Buckeye Firearms Association.
“Sales were through the roof on Saturday,” said Eaton. “People were buying everything they could out of fear the president would try to ban certain guns and high-capacity magazines.”
The deluge of buyers had officials working overtime. Background checks that normally took 15 minutes in California took more than four hours, Durkheimer said. In Colorado, background checks that normally take minutes turned into wait times of more than 12 hours, said CBI spokeswoman Susan Medina.
“We had to call in extra staff,” Medina said. “The wait times were high.”
The CBI says it processed more than 4,200 background checks on Saturday, the day after the Newtown, Conn., shooting. That surpassed the previous high of 4,028. Nationwide, FBI data shows 16.4 million background checks were run in 2011. An agency spokesman said Monday it did not keep daily numbers and would not have figures for December until early January.
The New York firm said Tuesday that it was deeply saddened by the shooting, and that it will hire a financial adviser to help with the process of selling its interests in Freedom Group, a major firearms manufacturer which, in addition to Bushmaster, produces Remington Arms.
A representative for Freedom Group could not be immediately reached for comment.
The announcement comes one day after the California State Teachers Retirement System, a large pension fund, told The Wall Street Journal that it was reviewing its $500 million investment commitment to Cerberus because of the firm’s stake in Freedom Group.
A representative for the California State Teachers Retirement System could not be immediately reached for comment on Tuesday.
Cerberus affiliates made an investment in Freedom Group in 2006. The firm said that Freedom Group does not sell weapons or ammunition directly to consumers, and that it does not believe that “Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition.”
Cerberus Capital Management makes investments on behalf of clients that include the pension plans of firemen, teachers, policemen, and other municipal workers and unions, endowments and other institutions and individuals.
Money made from the Freedom Group sale will be returned to its investors, Cerberus said.