Courtesy photo
In February, for instance, Piwowar, a Republican commissioner who was appointed by then-President Barack Obama, urged staff to “reconsider the implementation” of the pay-ratio rule, noting unanticipated challenges companies were facing to prepare their reports. Piwowar had previously questioned whether the conflict minerals rule was a misguided effort to reduce the strength of militia groups in the Democratic Republic of the Congo.
“The disclosure requirements have caused a de facto boycott of minerals from portions of Africa, with effects far beyond the Congo-adjacent region,” Piwowar said in January. “Legitimate mining operators are facing such onerous costs to comply with the rule that they are being put out of business. It is also unclear that the rule has in fact resulted in any reduction in the power and control of armed gangs or eased the human suffering of many innocent men, women and children in the Congo and surrounding areas.”
Piwowar served as the SEC’s acting chairman from Jan. 23 to May 4, when former Sullivan & Cromwell partner Jay Clayton was confirmed to lead the top markets regulator. In correspondence to Clayton and the Democratic senators on Thursday, the SEC Inspector General Carl Hoecker said his office was “unable to conclude that Commissioner Piwowar exceeded his authority during his three-month tenure as SEC acting chairman.”
“Moreover,” he added, “we are unable to conclude that Commissioner Piwowar’s actions may serve to undermine the SEC’s mission or could potentially prove to be a waste of the SEC staff’s time and resources.”
Warren and Brown, along with Sens. Robert Menendez and Brian Schatz, had questioned whether Piwowar’s decisions to opine and call for additional comments on the conflict minerals and pay ratio rules constituted an official agency action requiring the approval of Commissioner Kara Stein, the only other sitting member of the SEC at the time.
The SEC inspector general found Piwowar’s moves did not rise to the level of an official agency action, citing case law holding that “unofficial expression of the views of one member of [a commission] … is not a decisional pronouncement affecting legal rights and obligations.”
“In light of the foregoing, we do not find that Commissioner Piwowar’s actions as acting chairman violated any of the laws currently governing the SEC and our review identified no evidence that his actions could either undermine the SEC’s mission or potentially prove to be a waste of SEC staff time and resources,” Hoecker wrote.
