Two years ago, when the economy was a runaway train, so were the returns on private equity investments. Among the biggest winners were large public pensions, which had invested a staggering $500 billion out of a total $4.5 trillion in private equity — one dollar out of every 10.

But with stock prices now plummeting, experts are fearful that private equity returns are not far behind. Accusations are flying that private equity firms are spinning an elaborate fiction to hide their losses. READ MORE