President-elect Donald Trump on Wednesday chose Jay Clayton, a former Sullivan & Cromwell deal lawyer, as his nominee to head the SEC. Below are a few quick facts about his pick.
- Practice involves public and private mergers and acquisitions transactions, capital markets offerings, regulatory and enforcement proceedings, and other matters where multidisciplinary advice and experience is valued.
- Clayton also advises several high-net-worth families regarding their public and private investments.
- Thought leadership posted on his bio indicates significant interest/experience in cybersecurity.
- JD – University of Pennsylvania, 1993
Notable experience from bio:
- Goldman Sachs in connection with the investment of $5 billion by Berkshire Hathaway and the U.S. Treasury’s TARP Investment.
- Bear Stearns in connection with the sale of Bear Stearns to JPMorgan Chase and related matters.
- Initial public offering of $25 billion by Alibaba Group Holding Limited.
- Initial public offering of $2.375 billion by Ally Financial and private placements of $3 billion and $1.3 billion of common stock in Ally Financial.
- Public offering of $6.0 billion of common stock and mandatory convertible preferred stock by Lehman Brothers.
- Barclays Capital in connection with its purchase of assets of Lehman Brothers out of bankruptcy.
Trump’s official statement:
- “Jay Clayton is a highly talented expert on many aspects of financial and regulatory law, and he will ensure our financial institutions can thrive and create jobs while playing by the rules at the same time,” Trump said in a statement released on Wednesday, January 4, 2017. “We need to undo many regulations which have stifled investment in American businesses, and restore oversight of the financial industry in a way that does not harm American workers.”
From Clayton’s official statement:
- “(If confirmed) We will carefully monitor our financial sector, as we set policy that encourages American companies to do what they do best: create jobs.”
Quotes from media:
“ SEC Pick Jay Clayton Is a 180 From Chairman Mary Jo White,” The Wall Street Journal (January 4, 2017)
- WSJ Analysis – “…ends a streak of aggressive regulators and litigators overseeing the country’s top markets cop…signals Republicans prefer an SEC chairman who is attuned to the needs of Wall Street firms that grease the markets where companies go to raise capital.”
- Insight into Clayton’s Priorities – “In one of his few public statements on policy, Mr. Clayton oversaw a 2011 New York bar association report attacking the Obama-era SEC and Justice Department for “zealous” enforcement of laws intended to prevent American corporate bribery of foreign officials. The paper concluded they were “causing lasting harm to the competitiveness of U.S. regulated companies and the U.S. capital markets.”
- Trump Ties to Goldman – “ Clayton would become the latest Trump appointee with strong ties to Goldman Sachs, joining former Goldman executive Steven Mnuchin, Mr. Trump’s choice for Treasury secretary, and former Goldman President Gary Cohn, who will run the National Economic Council.”
- Endorsement – “He is incredibly well-versed in the regulatory environment in this country,” Mr. Greene, the former classmate and head of the corporate department at Cravath, Swaine & Moore LLP said. Mr. Greene said he doesn’t think the appointment of a deal lawyer will change the nature of SEC enforcement, but instead will “bring a fresh perspective.”
“Trump to Tap Wall Street Lawyer Jay Clayton to Head SEC,” The Washington Post (January 4, 2017)
- Critics – “Trump supporters did not vote to let the fox guard the henhouse on Wall Street,” Adam Green, co-founder for the Progressive Change Campaign Committee, said in a statement. Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, said, “This nomination of a Wall Street insider to regulate Wall Street proves that Donald Trump has no intention of getting tough on Wall Street.” “The nomination of Mr. Clayton to head the SEC underscores the shift away from enforcement,” Isaac Boltansky of Compass Point Research & Trading said in a research note Wednesday.
- Endorsement – Criticism of Clayton’s connections to Wall Street are unwarranted, said Bill McLucas, a securities lawyer with WilmerHale, who spent eight years as SEC enforcement chief. “His reputation is he is incredibly smart, incredibly talented and with deep experience in corporate governance,” he said. “It is a mistake to think lawyers that have labored in this area are somehow tainted in their judgment.”
I recently commented for an article in Compliance Week about Jay Clayton’s appointment and how his experience in M&A deals can be applied as chairman by being able to understand marketplace issues. The full article, “What to Expect from Trump’s SEC Nomination,” was published on January 10, 2017.