Jay Clayton, a partner at law firm Sullivan & Cromwell with close ties to Goldman Sachs, was confirmed as the next chair of the Securities and Exchange Commission by the Senate on Tuesday evening. Clayton’s term will expire June 5, 2021.
“We have always believed the top priority of the SEC should be protecting investors,” said David Bellaire, executive vice president and general counsel of the Financial Services Institute, in a statement responding to the confirmation. “Adopting a true, uniform fiduciary duty that protects investors and their access to affordable, objective financial advice must finally be given the serious attention it deserves.”
Since President Trump announced his pick for SEC chair earlier this year, Clayton has spoken very little on the record about the investment advisory industry he will soon oversee. As yet, it's unclear what his views are regarding the fiduciary standard or third-party examinations, for instance. Some say RIAs shouldn’t expect any more stringent enforcement; maybe expect a lot less.
Clayton, 50, represented Goldman in connection with the $10 billion bailout it received in 2008 as part of the government’s $700 billion rescue of banks during the financial crisis as well as a $5 billion investment by Warren Buffett’s Berkshire Hathaway Inc. in Goldman, according to Sullivan & Cromwell’s website. Other clients of his included Och-Ziff Capital Management Group LLC to Oaktree Capital Group LLC. Much of his legal work involved mergers and acquisitions, as well as representing firms facing U.S. investigations.
In a statement, Better Markets President and CEO Dennis Kelleher urged Clayton to take up the fiduciary duty rule, requiring broker/dealers to put clients’ best interests first.
“We hope Mr. Clayton knows that the shortest path to economic growth, job creation and broad-based prosperity would be to put Main Street’s interests first, protect investors and markets, and fearlessly enforce the rule of law. If so, we look forward to working with him and his team.”
Clayton replaces chair Mary Jo White, who was sworn in on April 10, 2013. Michael Piwowar has been acting chairman of the SEC since Jan. 23.
Bloomberg contributed to this report.
