Exams could be reduced following SEC review

Michael Piwowar may remove government lawyers’ power to open investigations without seeking approval from commissioners.

Private equity firms could face fewer compliance examinations if the Securities and Exchange Commission’s acting head strips government lawyers of their authority to open investigations without seeking approval from commissioners.

Michael Piwowar, the Republican serving as the SEC’s acting chairman, has requested an examination of delegated authority which gives senior attorneys the power to start probes, inspect firm and sign off some financial products, according to a Reuters report citing three sources.

It is currently common practice for officials in the enforcement division to issue subpoenas and negotiate settlements without commissioner participation, except in the largest and most sensitive cases.

The review will be overseen by the SEC’s general counsel, although there is no date for a conclusion.

Piwowar has previously questioned whether the enforcement division has too much autonomy. In a 2013 speech he argued commissioners, which are politically appointed, should have more sway over formal investigations.

Earlier in February he said enforcement work should go on as normal under his watch, and he told the acting director of the Office of Compliance Inspections and Examinations to “follow the evidence, follow the law.”