Fending off questions about his lucrative law practice and potential conflicts of interest, Jay Clayton, the Sullivan & Cromwell partner who was nominated to lead the U.S. Securities and Exchange Commission, on Thursday defended his private sector experience as an asset and said he was “committed to showing no favoritism to anyone in this position.”
Clayton, picked to succeed Mary Jo White as the top markets cop, faced scrutiny at the Senate Banking Committee over his corporate clients and the possible need to recuse himself from cases if he is confirmed as the SEC’s chairman.
Clayton earlier revealed in a financial disclosure that he raked in $7.6 million in the year leading up to his nomination, buoyed by a client roster that included big banks such as Goldman Sachs. President Donald Trump has picked Goldman alums for several regulatory roles in his administration.
Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, told Clayton that Trump selected Goldman Sachs’ “outside counsel” to run the SEC.
“You spent your career protecting some of the biggest names on Wall Street, and those relationships pose a host of conflicts for this position. I’m concerned you may need to recuse yourself too often at a time when we need a strong, independent SEC chair at the frontline of enforcement, not watching from the sidelines,” Brown, D-Ohio, said. “Your record representing banks and bankers and hedge funds and executives speaks for itself, but those people are already well-represented among the president’s friends, supporters, advisors and far too many people in all three branches of government.”
The committee’s chairman, Sen. Mike Crapo, R-Idaho, sought to help Clayton head off those questions from the outset of the hearing, asking him to weigh in on the conflict-of-interest concerns. Clayton described the breadth of his private experience — helping national and international clients with securities offerings, regulatory matters ad mergers and acquisitions — as a “strength.”
“As far as the extent of my practice, and whether the recusals that would be required and the potential conflicts will impair my ability to act as chair of the Securities and Exchange Commission, I do not believe they will do so,” Clayton said.