Jay Clayton, a corporate lawyer and President Donald Trump’s recommendation, is one step closer to becoming the next head of the US Securities and Exchange Commission (SEC) after his nomination was passed be a Senate committee on 4 April
The Senate Banking Committee voted 15 to 8 to push forward Clayton’s nomination to the next stage where it will face a final vote from the full Senate to receive confirmation. This has yet to be scheduled.
Previously, Clayton has faced backlash from individuals arguing that it would be a conflict of interest for him to be chair as he could show favouritism to his Wall Street connections.
At the Senate committee’s hearing, Sherrod Brown, the panel’s senior Democrat, said: ‘Clayton is an experienced corporate lawyer, but his deep ties to Wall Street will leave him hopelessly conflicted in the SEC’s most high profile enforcement actions.
‘We have seen big Wall Street banks commit one violation after another. The American people should not have to trust that one of Wall Street’s own will be able to hold big banks accountable.
‘In an administration already rife with conflicts, Mr Clayton in particular will face conflicts in cases involving the biggest banks on Wall Street, if not the world, that he used to represent. Those conflicts mean he will be on the sidelines, unable to vote on some of the SEC’s most important cases.’
Brown was one of the members who voted against Clayton claiming that the SEC needs to be led by an independent chair saying: ‘Clayton’s conflicts, and his failure to understand the concerns and risks faced by American savers, I am unable to support his nomination.’
However, committee chairman, Mike Crapo said that Clayton's 'extensive expertise and experience in our financial markets will be a benefit to the SEC and American people'.
Clayton is currently a partner at the law firm Sullivan & Cromwell and specialises in mergers and acquisitions transactions and capital market offerings. He has previously represented Wall Street firms such as Goldman Sachs and his clients have included Deutsche Bank, Volkswagen and UBS.
The SEC has announced that Kara Novaco Brockmeyer, Chief of the Enforcement Division’s Foreign Corrupt Practices Act (FCPA) Unit, is planning to leave later this month after 17 years at the SEC.
Since 2011 she has led 38 lawyers, accountants and other specialists focusing on violations of the anti-bribery and accounting provisions in US law.
Following her departure, Charles Cain, who is currently the deputy chief of the FCPA Unit, will serve as interim chief.
