Trump’s SEC Chair Pick Sets Stage for Regulation Rollback

Sullivan & Cromwell partner Jay Clayton, President-elect Donald Trump’s pick to chair the Securities and Exchange Commission, is not a longtime supporter of Trump but was drawn to the job because he passionately believes the current regulatory environment is burdening American companies with unnecessary rules and hindering economic growth, a source close to the veteran Wall Street lawyer says.

Clayton is expected to roll back at least some of the rules and regulations enacted under current chair Mary Jo White if he is confirmed. The attorney has a long history on Wall Street, working on high-profile deals that included Barclays Capital’s purchase of Lehman Brothers and Berkshire Hathaway’s investment in Goldman Sachs. Both transactions were done during the height the financial crisis.

The source says Clayton is an idealist who believes that the costs of complying with many of the regulations enacted since the financial crisis are “brutal.” At the same time, the source says, Clayton doesn’t plan to “tear everything down and make it regulation-free.” In a statement when the nominee was announced, Trump said, “He will ensure our financial institutions can thrive and create jobs while playing by the rules at the same time.”

Clayton’s wife Gretchen is a wealth manager at Goldman. Although it’s expected that his wife’s Goldman affiliation will be raised during the confirmation process, industry executives emphasize that her wealth advisory position has nothing to do with decision-making at the firm as a whole.

Clayton, who lives in Manhattan’s Tribeca neighborhood with his wife and three children, contrasts starkly with Trump, who won the election after a contentious campaign that divided the country. “He’s modest, understated, even keeled, open minded, not dogmatic,” says the source, who has known him for 20 years.

Although Clayton would arguably bring much-needed financial experience to his role as one of the country’s most influential financial regulators, the lawyer is one of several Trump nominees who are being criticized for their ties to Wall Street — including Gary Cohn, chief operating officer and president of Goldman and Trump’s pick to head the National Economic Council. At Sullivan & Cromwell, Clayton focused on mergers and acquisitions, capital markets, regulatory and enforcement proceedings, and advising wealthy families on their investments.

He’s worked on notable initial public offerings, including the $25 billion IPO of Alibaba Group, as well as Howard Marks’s Oaktree Capital Group, hedge fund Och-Ziff Capital Management, and investment bank Moelis & Co.