Democratic members of the Senate Banking Committee have asked the U.S. Securities and Exchange Commission to investigate whether its acting chair has exceeded his authority in directing staff to review two Obama-era rules.
In a letter to the SEC’s internal watchdog, the senators said Michael Piwowar has taken “questionable” actions to undo congressional mandates under the 2010 Dodd-Frank financial reforms, including the “conflict minerals” rule and a regulation requiring that publicly-traded firms disclose how senior executives’ compensation compares with that of the firm’s average employee.
“We are concerned that Commissioner Piwowar’s actions may lack adequate justification, undermine the SEC’s mission, exceed his authority as acting chairman, violate other procedural requirements, and could potentially prove to be a waste of the SEC staff’s precious time and resources,” the letter said.
The senators — Elizabeth Warren (Mass.), Bob Menendez (N.J.), Sherrod Brown (Ohio) and Brian Schatz (Hawaii) — claimed Piwowar had acted to advance his political preferences rather than the SEC’s mission and also noted that “There is no evidence that any of these changes in the SEC’s course are desired, or have been sought, by” SEC Chair-nominee Jay Clayton.
As The Hill reports, Piwowar, a Republican, “has taken unusually aggressive steps to reel in SEC rules panned by Republicans during his short tenure as acting chairman.”
In late January, he asked staff to review prior compliance guidance on the conflict minerals rule to determine if “additional relief” is appropriate, calling the regulation “misguided.” A week later, he directed staff to reconsider the implementation of the CEO pay rule, which he has described as “a blatant attempt to limit executive compensation.”
The four senators said Piwowar had engaged in “a major exertion of authority for a position usually seen as a short-term caretaker” and his “personal distaste for a congressional mandate is not sufficient grounds to attempt to weaken a final rule that has been approved by the SEC.”
They asked the SEC’s inspector general to “conduct an investigation into each of these decisions to determine whether they are legally permissible and in keeping with the SEC’s core mission.”