Senators Call for SEC Investigation into Republican SEC Commissioner who Threatened Citigroup After it Updated Policies to Promote Gun Safety
6.14.2018
NEW YORK – Today, six U.S. Senators called for a Securities and Exchange Commission Inspector General investigation into reports that a Republican-appointed SEC Commissioner, Michael Piwowar, threatened retaliatory action against Citigroup after the lender updated its policies to promote responsible conduct by customers engaging in firearms transactions after February’s mass school shooting in Parkland, Florida.
STATEMENT FROM NICK SUPLINA, MANAGING DIRECTOR FOR LAW AND POLICY FOR EVERYTOWN FOR GUN SAFETY:
“Citigroup took measures to protect the American public from gun violence. It’s nothing short of an abuse of power for Commissioner Piwowar to use his position at SEC to threaten Citigroup based on his personal views about guns.”
In a letter sent today to SEC Inspector General Carl Hoecker, Sens. Chris Van Hollen (D-MD), Richard Blumenthal (D-CT), Dianne Feinstein (D-CA), Kamala Harris (D-CA), Robert Menendez (D-NJ) and Chris Murphy (D-CT) wrote (partial excerpt):
While we are not advocating for or taking a position on the regulatory matter that was the subject of the meeting, we do have concerns that Commissioner Piwowar may have abused his government position in an attempt to unduly influence Citigroup to reverse a business decision that conflicts with his personal and political views. We therefore ask that your office review this incident and take action as appropriate.
During the April 24, 2018 meeting, executives from Citigroup met with Commissioner Piwowar to discuss derivatives regulation. Recent news reports indicate that the Commissioner “castigat[ed] them for straying into social policy” while “glowering and speaking emphatically” about guns.[1] 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.
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[W]e respectfully request that your office open an investigation into this meeting to protect the integrity of the agency and its decision-making process. Further, we ask that you investigate whether Mr. Piwowar observed proper rules and procedures with regard to the Federal Sunshine Act, as the meeting in question was in connection to a rule that is currently being considered by the SEC.
In March, Citigroup announced that it would implement new guidelines for its customers engaging in firearms transactions, including: requiring its customers to sell firearms only to people 21 years of age or older; requiring background checks on all gun sales; prohibiting its customers from selling bump stocks; and prohibiting its customers from selling high-capacity magazines.
In April, during a meeting between Citigroup executives and SEC Commissioner Michael Piwowar, Piwowar reportedly threatened retaliatory action against Citigroup over its new firearms transactions rules.
“Shortly after the Citigroup executives arrived at his office, Piwowar, according to people familiar with the matter, began castigating them for straying into social policy. Glowering and speaking emphatically, he reminded them that Citigroup was given billions in government bailout money after the financial crisis. In what some of the executives took as a thinly veiled threat, Piwowar said he knew Citigroup wanted the SEC to ease regulations on derivatives and proprietary trading, and suggested they might have trouble finding the votes on the Republican-led commission.”
Sen. Van Hollen also asked SEC Chairman Jay Clayton about Piwowar’s meeting and comments during an appropriations subcommittee hearing earlier this month.