By Pam Martens and Russ Martens: March 22, 2021 ~
Michael Piwowar
At both the March 9 Senate Banking Committee and March 17 House Financial Services Committee hearings on the conflicts with Robinhood and Citadel in trading small investors’ shares in GameStop and other meme stocks, the same witness was called by the Republican side of the Committees. His name is Michael Piwowar.
In Piwowar’s opening statements to both Committees, he introduced himself as the Executive Director of the think tank, the Milken Institute, and as a former Commissioner at the Securities and Exchange Commission. He apparently supplied this same information to the Chairs of both Committees because that is also how Senate Banking Chair Sherrod Brown and House Financial Services Chair Maxine Waters introduced Piwowar.
What was not disclosed for the public record at either hearing is the fact that Piwowar is also being paid as a Senior Advisor to a Wall Street trading firm called GTS. Wall Street On Parade verified that information with GTS. Piwowar has served as a Senior Advisor to GTS from March 2019 to the present, according to the company.
GTS is the majority owner of ClearList, which seeks to raise money for private companies. In January, the company received approval from the self-regulator, FINRA, to operate an alternative trading system (ATS) which the company said would pave the way “for ClearList to offer secondary trading in private company securities on its platform.”
And it just so happens that at both recent congressional hearings, Piwowar was pushing for the SEC to redefine its Accredited Investor definition to open the way for small investors to buy shares of private companies. This topic had nothing to do with the GameStop/Robinhood/Citadel issues around which the Committees had called the hearings, but Piwowar was determined to advance the topic.
In his written testimony to the House Financial Services Committee, Piwowar pushed this agenda as follows:
“The SEC’s accredited investor definition essentially divides the world of private company investors into two arbitrary categories of individuals — those persons who are accorded the privileged status of being an accredited investor and those who are not. In short, if you make $200,000 or more in annual income or have $1 million or more in net worth, then you are in the privileged class and could choose to invest in the full panoply of investments, whether public or private. If not, the SEC has decided that, for your protection, you are restricted access to invest in private companies…I challenge the SEC’s investor protection rationale for prohibiting non-accredited investors from investing in high-risk companies. ”