×

Senator wants answers on activists, buybacks before voting on SEC nominees

  • Sen. Tammy Baldwin wants two SEC nominees to answer questions about activist investors and stock buybacks.
  • Without the responses from the nominees, Robert Jackson and Hester Peirce, she won't agree to a unanimous consent request to hold a vote on their confirmations, which would expedite the process.

Sen. Tammy Baldwin, D-Wis., told CNBC on Wednesday that she wants two Securities and Exchange Commission nominees to answer questions about activist investors, stock buybacks and executive compensation.

Without the responses from the nominees, Robert Jackson and Hester Peirce, she won't agree to a unanimous consent request to hold a vote on their confirmations, which would expedite the process.

In an interview with CNBC's "Closing Bell," Baldwin said she's concerned about the role of activists and the proliferation of buybacks, which she said has ballooned since the SEC instituted its "safe harbor" rule in 1984.

"The SEC has statuary authority to do a number of the things I'm calling for with regard to reining in activist hedge funds as well as looking more closely at what's happened with stock buybacks," said Baldwin, a vocal critic of Wall Street.

Those buybacks have "major impacts" on the economy, she said, with companies giving back to shareholders instead of investing in their workers or business.

In letters sent to the nominees last week, Baldwin wrote, "The SEC has presided over this 'financialization' of our economy, which has facilitated the looting of the American corporation by short-term shareholders."

Her letters come on the heels of a bill she reintroduced a few months ago that seeks to restrict the powers of activist investors through more stringent disclosures.

Any delay to Peirce and Jackson's nominations is significant because with only three commissioners currently, the SEC faces challenges engaging in any major rule-making. SEC quorum rules stipulate that the SEC cannot consider any rule-making unless at least three existing commissioners are present, so the absence of any current commissioner prevents that work from occurring.

Jackson did not immediately respond to a request for comment and a spokesperson for Peirce declined to comment, citing the ongoing confirmation process.

— CNBC's Leslie Picker and Reuters contributed to this report.