President-elect Donald Trump plans to nominate Wall Street lawyer Jay Clayton to be chairman of the Securities and Exchange Commission, his staff announced Wednesday. If confirmed, Clayton would be in charge of overseeing the $27 trillion U.S. equity market, making him arguably the most powerful financial regulator in the world.
Clayton is currently a partner at the white-shoe Manhattan law firm Sullivan & Cromwell, where he has primarily represented major corporations in mergers, initial public offerings and compliance issues. Among his biggest clients are the e-commerce site Alibaba and the investment bank Goldman Sachs.
He is the latest in a string of Trump administration officials with deep ties to Goldman Sachs. Others include Trump’s nominee for Treasury Secretary, Steve Mnuchin, a former Goldman Sachs executive, and Gary Cohn, a former Goldman Sachs chief operating officer who is the incoming president’s pick to lead the National Economic Council.
“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 Wednesday.
The president-elect also suggested that the “rules” Clayton would be tasked with enforcing wouldn’t be as stringent as current Wall Street regulations. “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,” Trump said.
In statement thanking Trump for the nomination, Clayton pledged to “work together with key stakeholders in the financial system to make sure we provide investors and our companies with the confidence to invest together in America.”
Under his leadership, Clayton said, the SEC “will carefully monitor our financial sector.” It would set policy that “encourages American companies to do what they do best: create jobs,” he added.
Taken together, Trump and Clayton’s statements signal what many experts had long anticipated: That the SEC will be more friendly to Wall Street under a Trump presidency than it was under President Barack Obama, who was elected at the height of the 2008 financial crisis.
Sen. Elizabeth Warren (D-Mass.) denounced the pick. “Mr. Clayton has dedicated his career to defending Wall Street firms and other big companies, and there’s nothing in his track record to suggest that he’ll push the SEC to stand up to those kinds of companies and protect the interests of ordinary investors,” Warren said in a statement. “With each passing selection for his economic team, President-elect Trump is making clear that his administration will put Wall Street first and working families last.”
Clayton represented several companies that received federal bailout funds in 2008. He also represented Ally Bank as part of a massive settlement between financial institutions and federal regulators over fraudulent mortgage servicing.
If confirmed, Clayton will succeed the current SEC Commissioner, Mary Jo White, whose term ends on Inauguration Day on Jan. 20. White also represented major financial corporations before becoming the nation’s top Wall Street regulator.
This article has been updated to include Warren’s comment.