Wall Street Lawyer Jay Clayton Picked to Head SEC

WALL ST., NY — President-elect Donald Trump continued to build his administration Wednesday by announcing his plan to nominate Walter "Jay" Clayton to head the Securities and Exchange Commission, the agency meant to regulate the financial industry.

Clayton, a fellow Penn alum (he attended college and law school there), is a partner at New York law firm Sullivan & Cromwell, where he has represented banks like Barclays Capital, Goldman Sachs, and Bear Stearns in mergers and acquisitions, and worked on the initial public offering of Alibaba Group Holding Company. Additionally, he defended several "large financial institutions," as his website puts it, against charges of violating federal regulations related to mortgage claims.

A statement released Wednesday on Trump's website euphemistically described Clayton's past work as "decades of experience helping companies navigate complex federal regulations."

The statement said that "Clayton will play an important role in unleashing the job-creating power of our economy by encouraging investment in American companies while providing strong oversight of Wall Street and related industries."

Clayton did not immediate respond to a request for comment, but he was quoted in a Trump team statement, saying: “We will carefully monitor our financial sector, as we set policy that encourages American companies to do what they do best: create jobs."

An adviser to Goldman Sachs whose wife, Gretchen Butler Clayton, currently works there as a private wealth advisor, Clayton would join several other Trump appointees affiliated with the investment bank. These include Steven Mnuchin, a former Goldman Sachs trader who has been nominated to be Treasury secretary, Wilbur Ross, the billionaire investor, who has been picked as the next commerce secretary, and Gary D. Cohn, president and COO at Goldman Sachs, will be Trump’s economic top policy adviser. And of course Steve Bannon, Trump's chief strategist, also worked at Goldman in the past.

Responses to the announcement ranged from frustrated to unsurprised.

Matt Taibbi, a journalist who has covered Goldman Sachs and is the author of the book The Divide: American Injustice in the Age of the Wealth Gap, tweeted:

Dennis Kelleher, President and CEO of Better Markets, a non-profit, non-partisan organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, took a harder line in a statement, saying:

“While Mr. Clayton may be an excellent lawyer representing Goldman Sachs and Wall Street’s too-big-to-fail banks, America’s families need to know that he will represent them as zealously and as effectively. He must lead without fear or favor and he must not bring the failed mindset that 'what’s good for Wall Street is good for America,' which the 2008 financial crash proved catastrophically wrong."

“The SEC is supposed to be the cop on the Wall Street beat," Kelleher said. "When it fails to do its job, the American people pay the price in lost homes, jobs, savings and so much more[...]These issues need to be the focus of the Senate confirmation process.”

Composite image via Sullivan & Cromwell and Creative Commons.