Banks Thought They Had a Win With Guns. Now They’ve Got a Big GOP Headache

On April 24 a handful of Citigroup Inc. executives went to the Securities and Exchange Commission for what they thought would be a routine meeting about a boring but key part of their business: derivatives regulation. Instead, they got a stern lecture on guns. A month earlier, in the aftermath of the school shooting in Parkland, Fla., Citigroup had announced it would curtail some of the business it does with companies that sell firearms. That didn’t go over well with Michael Piwowar, one of three Republican appointees on the five-member SEC.

Shortly after the Citigroup executives arrived at his office, Piwowar, according to people familiar with the matter, began castigating them for straying into social policy. Glowering and speaking emphatically, he reminded them that Citigroup was given billions in government bailout money after the financial crisis. In what some of the executives took as a thinly veiled threat, Piwowar said he knew Citigroup wanted the SEC to ease regulations on derivatives and proprietary trading, and suggested they might have trouble finding the votes on the Republican-led commission.