Senate Democrats call for investigation of SEC's Piwowar

Senators cite reports that the outgoing commissioner pressured Citigroup officials over the bank's decision to limit business with gun firms

Jun 14, 2018 @ 2:53 pm

By Hazel Bradford

Six Democrat senators asked the SEC's inspector general Wednesday to investigate whether outgoing Commissioner Michael Piwowar might have abused his position "in an attempt to unduly influence Citigroup" over its decision to limit business with gun firms.

In the letter to Carl Hoecker, inspector general of the Securities and Exchange Commission, the senators questioned reports that, during an April 24 meeting with Citigroup Inc. officials to discuss derivatives rulemaking being considered at the SEC, Mr. Piwowar tried to get the officials to reverse their gun policy because it "conflicts with his personal and political views."

Mr. Piwowar is one of three Republicans on the commission, including Chairman Jay Clayton. He is leaving July 7.

"Recent news reports indicate that the commissioner 'castigat(ed) them for straying into social policy' while 'glowering and speaking emphatically' about guns. Most concerning are reports that Commissioner Piwowar delivered a 'thinly veiled threat' by suggesting that the commission would withhold support for Citigroup's regulatory request due to the company's unrelated and entirely lawful corporate practices relating to firearms," the senators' letter said.

"It is alarming that Commissioner Piwowar, who is expected to be independent, appears ready to condition his support for regulatory change on Citibank's withdrawal of a responsible corporate practice that conflicts with his personal views or political agenda," the senators said.

Regulatory decisions should be based on facts and merits, "not on unrelated corporate practices that a particular commissioner dislikes or that are disliked by organizations they support," said the letter, signed by Sens. Chris Van Hollen of Maryland, Dianne Feinstein and Kamala Harris of California, Christopher Murphy and Richard Blumenthal of Connecticut, and Robert Menendez of New Jersey.

Calls to Mr. Piwowar and the SEC inspector general were not returned.

(More: Piwowar departure will complicate action on SEC advice rule)

Hazel Bradford is a reporter at InvestmentNews' sister publication, Pensions&Investments.

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