Jay Clayton

Corporate Cabinet Profile Series

See the full Corporate Cabinet at CorporateCabinet.org.

Trump’s pick for: Chairman of the U.S. Securities & Exchange Commission (SEC)

Corporate Connection: Goldman Sachs, Ally Financial, Alibaba Group

Walter “Jay” Clayton has such deep ties to the financial industry that he may have to recuse himself from many major enforcement actions his agency undertakes. Clayton is a partner with Sullivan & Cromwell, a Wall Street law firm. According to The New York Times, Sullivan & Cromwell has been Goldman Sachs’ “go-to law firm for more than a century.” His wife, Gretchen Clayton, is a wealth management adviser at Goldman Sachs — whose activities fall squarely under the purview of the SEC. He was the lead signatory to the New York Bar Association’s 2011 research paper complaining that the Foreign Corrupt Practices Act (FCPA) — that is, the enforcement of international anti-bribery law — imposes unreasonable costs on U.S. corporations. The SEC enforces the FCPA. The report was part of a coordinated campaign by the U.S. Chamber of Commerce to limit enforcement of laws against overseas corruption. Clayton represented Italian oil firm Eni in an FCPA case alleging Nigerian officials were bribed with suitcases full of cash.

• Because of Clayton’s wife’s Goldman Sachs income, a congressional aide said “Clayton will be the most financially conflicted SEC chairman in history.” He will be required to recuse himself from enforcement actions against Goldman Sachs, but not regulatory actions that could impact Goldman Sachs’ profits.
• Regarding Clayton’s Goldman Sachs recusals, Rolling Stone’s Matt Taibbi wrote, “Who needs an SEC chief who has to stay on the sidelines for some of the most important cases the agency considers? It’s like having a police commissioner who has to cover his ears every time someone mentions the Crips or the Latin Kings.”
• Clayton advised Goldman Sachs on the $5 billion investment it received from Warren Buffett’s Berkshire Hathaway during the financial crisis.
• Before the financial crisis, Clayton advised Bear Stearns during its sale to JPMorgan Chase.
• During the crisis, he advised Barclays Capital in buying up assets left by the Lehman Brothers bankruptcy. The transaction has been criticized as “the greatest bank robbery you never heard of.”
• He represented Ally Financial in connection with the $25 billion settlement related to robo-signing and other foreclosure abuses with the federal government and state attorneys general.
• He advised the Chinese e-commerce company Alibaba Group on its $25 billion initial public offering, the largest ever IPO.