Republican U.S. Senate Economist Said to Be Vetted for SECJoshua Gallu and Robert Schmidt
Michael Piwowar, the chief Republican economist for the U.S. Senate Banking Committee, is being vetted for an appointment to the Securities and Exchange Commission when a slot opens later this year, according to four people briefed on the matter.
Piwowar would be nominated for the seat held by Republican Commissioner Troy Paredes, whose term ends in June, according to the people, who spoke on condition of anonymity because the discussions aren’t public. Paredes, who was a professor at the Washington University School of Law before he joined the SEC in 2008, has told people he is eager to return to academia.
If Piwowar were nominated and confirmed he would be the only economist on a five-member commission that historically is made up of lawyers.
Having an economist as a member can bring “an overall appreciation of economic analysis in developing and implementing rules, and more specifically, an understanding of robust cost-benefit analysis,” said Cynthia A. Glassman, who was a Republican commissioner at the agency from 2002 to 2006 and the last economist appointed to the SEC.
Earlier in his career, Piwowar was a staff member in the SEC’s office of economic analysis. The people said he could help sharpen Republicans’ focus on measuring the costs of new regulations as the agency completes rules from the 2010 Dodd-Frank Act.
The SEC has lost a number of challenges in federal court on rules that opponents argued didn’t properly take into account the regulatory costs. Business groups are making similar arguments in other cases that are pending, including Dodd-Frank requirements that companies disclose whether they use metals from the Democratic Republic of Congo, and that oil, gas and mining firms report payments made to foreign governments.
As President Barack Obama’s second term gets under way, the commission is changing. Mary Jo White, a former U.S. attorney and Wall Street defense lawyer, is poised to take over as chairman pending Senate confirmation. In addition, the term of Elisse Walter, who has been holding down the chairmanship since the departure of Mary Schapiro in December, is already expired; the White House is expected to make a nomination for her seat soon.
By tradition, the president’s party picks three of the five SEC members, and the opposing party chooses two. The search for a replacement for Paredes is being handled by the Senate Republican leadership.
Piwowar referred questions to Amanda Critchfield, a spokeswoman for Republicans on the banking committee, who declined to comment. Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, a Kentucky Republican, also declined to comment.
Before going to work for the Senate Banking Committee, Piwowar was a senior economist on the President’s Council of Economic Advisers staff in both the George W. Bush and Obama administrations, according to the website of the College of Business at Iowa State University, where Piwowar was an assistant professor from 1998 to 2004.
During part of that time, he was also a visiting academic scholar in the SEC’s office of economic analysis, where he co-authored a study on municipal bond pricing, according to a resume posted online from a previous employer, Securities Litigation and Consulting Group, Inc.
Piwowar became a senior financial economist at the SEC in 2004, according to the resume. His research has involved some of the central issues the agency is now confronting, including market structure and computerized trading.
He also analyzed ill-gotten gains and investor harm in securities fraud enforcement matters, inadequate disclosure and best-execution stock pricing violations. He left the agency in 2006.
A 1990 graduate of Pennsylvania State University, Piwowar has an MBA from Georgetown University and a Ph.D in Finance, also from Penn State.