A number of prominent Democratic senators called on three federal departments to launch investigations into what the lawmakers called “possible insider trading” conducted by billionaire investor Carl Icahn.
In a letter sent Tuesday, the lawmakers urged the heads of the Commodities Futures Trading Commission, Securities and Exchange Commission, and Environmental Protection Agency to look into “potential insider trading, market manipulation, and other securities and commodities law violations in the market for renewable fuel credits.”
The senators pointed to some of Icahn’s energy-sector investments, including his stake as majority owner of CVR Energy, in addition to his role as an adviser to President Donald Trump.
In that role, Icahn focuses on regulatory reform.
“As the majority owner of CVR Energy, Mr. Icahn bet heavily in 2016 on a drop in the price of renewable fuel credits, which ultimately resulted in a $US50 million windfall for the company,” the letter from Democrats said. “Mr. Icahn then secured a position as a senior adviser to President Trump, from which he was, according to press reports, able to influence decisions that drove down the price of the credits.”
“Beginning in late 2016, a series of events occurred which eventually reduced the price of renewable fuel credits by roughly 70 per cent from peak cost,” it continued. “First, President Trump, reportedly acting on advice from Mr. Icahn, selected Mr. Scott Pruitt, a vocal critic of the renewable fuel program, as his choice for EPA administrator. Public reports in February 2017 then indicated that Mr. Icahn, in his role as a special advisor, proposed to the White House a number of changes to the renewable fuel credit program that drove down prices — all while his company was dumping credits to buy back later at a cheaper price.”
The senators were referencing reports in Reuters detailing his bets against biofuels credits as he began advising Trump. Icahn has said previously that his advocacy on biofuels regulation was not aimed at self-interest, but rather at the broad US refining industry.
The senators wrote that they have “no way of knowing” if Icahn made trading decisions based on information not available to the public “or otherwise manipulated the market.”
Sens. Elizabeth Warren of Massachusetts, Debbie Stabenow of Michigan, Tom Carper of Delaware, Sherrod Brown of Ohio, Sheldon Whitehouse of Rhode Island, Tammy Baldwin of Wisconsin, Tammy Duckworth of Illinois, and Amy Klobuchar of Minnesota signed on to the letter.
Additionally, the senators said Icahn’s purported role in helping Trump select both Pruitt and SEC Chairman Jay Clayton might mean the two need to recuse themselves from such an inquiry.
A representative for Icahn did not immediately return a request for comment.
You can read the full letter here.
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