WASHINGTON — The Senate Banking Committee approved the nomination of Jay Clayton as chairman of the Securities and Exchange Commission in a 15-8 vote on Tuesday.

Clayton’s nomination has drawn fire from progressives who point to his work as a securities lawyer at Sullivan & Cromwell, where he defended Wall Street firms including Goldman Sachs, UBS and Barclays.

SEC Chairman Jay Clayton says the agency's proposed new database will make the prior actions of repeat offenders and fraudsters more visible to investors.
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,” one senator said.

“Mr. 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,” Sen. Sherrod Brown, D-Ohio, said in his prepared remarks.

Brown added that Clayton may be forced to recuse himself from cases that involve old clients.

However, Clayton was able to get support from moderate Democrats on the committee, including Sens. Jon Tester of Montana, Heidi Heitkamp of North Dakota and Mark Warner of Virginia. The 12 Republicans on the committee also voted in favor of sending Clayton’s nomination to the full Senate for final approval.

Panel chairman Sen. Mike Crapo, R-Idaho, disregarded concerns about Clayton’s previous work, and cited previous SEC chairms, including Mary Jo White, who defended Wall Street firms before being named by President Bill Clinton as U.S. attorney general for the Southern District of New York and then SEC chairman by President Barack Obama in 2013.

“While some have raised issues about his previous work creating conflicts, Mr. Clayton is not new in this regard, nor will he be any less vigilant to ensure that he acts appropriately and ethically,” Crapo said in his prepared remarks.

Clayton is expected to get approved by the upper chamber, where he will need a simple majority to be confirmed.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.