Dem senators ‘seek assurances’ Icahn not swaying regulators on AIG: report

A pair of Democratic senators are voicing concern over whether President Trump’s special adviser Carl Icahn is trying to sway U.S. regulators to lift the government’s “too-big-to-fail” designation on American International Group (AIG), Reuters reports.

In a letter to Treasury Secretary Steve Mnuchin on Thursday, Sens. Elizabeth Warren (D-Mass) and Sheldon Whitehouse (D-R.I.) say that the billionaire investor still stands to benefit from his “massive business interests,” including a substantial stake in AIG, despite serving as a special adviser to Trump on regulation.

AIG, an insurance corporation, is among two nonbanks to be considered by the U.S. government to be a “systemically important financial institution” (SIFI)— commonly called “too big to fail.”

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That designation means that, if such a company were to collapse, it would devastate the financial system. Such institutions are also subject to stricter oversight and regulations.

Trump has ordered a review of the process by which companies are designated too big to fail.

Icahn previously urged AIG to scale back in order to convince regulators that the insurance giant should no longer be marked by the designation, though he has not continued to press the issue, according to Reuters.

In their letter, Warren and Whitehouse also indicate that Icahn met with Jay Clayton, chairman of the Securities and Exchange Commission and a member of the Financial Stability Oversight Council (FSOC), the panel that designates nonbank financial institutions as systemically important financial institutions.

“Given Mr. Icahn’s recent modification of his position on the breakup of AIG, and his past interactions with administration officials, we write to seek assurances that Mr. Icahn has not provided input on or received information on the pending FSOC decision on AIG’s SIFI status,” the two Democrats wrote.

According to Reuters, the FSOC is set to meet Friday to discuss AIG’s “too-big-to-fail” designation.