Jay Clayton (attorney)
|32nd Chairman of the Securities and Exchange Commission|
|Assumed office |
May 4, 2017
|Preceded by||Mary Jo White|
Walter Joseph Clayton III
July 11, 1966
Newport News, Virginia, U.S.
|Spouse(s)||Gretchen Butler Clayton|
University of Pennsylvania (BS, JD)
University of Cambridge (BA, MA)
Walter Joseph "Jay" Clayton III (born July 11, 1966) is an American attorney and Chairman of the U.S. Securities and Exchange Commission.
Clayton was born at Fort Eustis in Newport News, Virginia. He grew up near Hershey, Pennsylvania, where his father worked for the local chocolate company, and Wallingford, Pennsylvania. Clayton graduated from Strath Haven High School in 1984. After attending Lafayette College, where he was a member of the soccer team, Clayton transferred and received his Bachelor of Science in Engineering from the University of Pennsylvania in 1988 (summa cum laude), and received the Thouron Award for post-graduate study in the United Kingdom. He received a Bachelor of Arts and Master of Arts in economics from the University of Cambridge in 1990, where he captained the University of Cambridge basketball team. He earned his Juris Doctor from the University of Pennsylvania Law School in 1993 (cum laude and Order of the Coif).
During college and graduate school, Clayton was a member of the Ocean City Beach Patrol, an intern with the U.S. Attorney's Office in Philadelphia and the U.S. House of Representatives, and an employee of United Engineers and Constructors.
From 1993 to 1995, Clayton clerked for Judge Marvin Katz of the District Court for the Eastern District of Pennsylvania.
After being a summer associate at the firm in the summer of 1992, Clayton joined Sullivan & Cromwell full-time in October 1995 and became a partner in January 2001. At Sullivan & Cromwell, Clayton was a member of the firm's management committee and co-managing partner of the firm's General Practice Group. He specialized in mergers and acquisitions transactions and capital markets offerings and represented prominent Wall Street firms, including Goldman Sachs. He served as an adviser to numerous companies regarding issues related to the SEC, Federal Reserve, Department of Justice, and other agencies.
He has also helped multiple corporations raise money through initial public offerings, including Alibaba Group, Ally Financial, Och-Ziff Capital Management, Oaktree Capital Management, Blackhawk Network Holdings, and Moelis & Company. During the financial crisis of 2007–2008, Clayton advised Bear Stearns in its fire sale to JPMorgan Chase in 2007, Barclays Capital in the purchase of Lehman Brothers' assets following their bankruptcy, and Goldman Sachs in connection with the investment by Berkshire Hathaway.
Clayton disclosed to the U.S. Office of Government Ethics that his other corporate clients had included TeliaSonera AB, Ally Financial, Deutsche Bank, UBS, Volkswagen, SoftBank Group, The Weinstein Company, Pershing Square Capital Management, and Valeant Pharmaceuticals. Clayton's individual clients included Ocwen's former head William Erbey, Paul Tudor Jones, former Attorney General of Ireland Peter Southerland, CDW founder Michael Krasny and LinkedIn founder Reid Hoffman.
Clayton earned $7.6 million in 2016 from his firm and has a family wealth of at least $50 million. A substantial portion of his holdings were in mutual funds of the Vanguard Group. His investments also included private funds managed by Apollo Global Management, Bain Capital, J.C. Flowers & Co., and Richard C. Perry but he divested these investments upon confirmation.
Nomination and confirmation
On January 4, 2017, President-elect Donald Trump announced his intention to nominate Clayton to be SEC Chairman, and he was nominated on Inauguration Day, January 20, 2017. Clayton's nomination was endorsed by Manhattan District Attorney Cyrus Vance Jr. U.S. Senator Catherine Cortez Masto, a Democrat representing Nevada, expressed concern that Clayton represented Swedish firm TeliaSonera in a proposed venture that would combine Russian telecommunications companies MegaFon and Altimo. Clayton is not thought to have any ties to the Russian companies. On April 4, 2017, the Senate Banking Committee voted 15-8 to take Clayton's nomination to the full Senate, with three Democrats voting in favor of Clayton.
On May 2, 2017, the U.S. Senate voted 61-37 to confirm Clayton as Chairman of the SEC. Votes cast in favor of Clayton's confirmation included nine Democrats and one Independent alongside 51 Republican votes. On May 4, 2017, Clayton was sworn in, marking the official beginning of his role as Chairman.
In connection with the nomination of Clayton in January, President Trump said in a statement that "[w]e need to undo many regulations which have stifled investment in American businesses, and restore oversight of the financial industry in a way that does not harm American workers." Upon Clayton's swearing-in, the SEC Commission consisted of Clayton; Michael Piwowar, who was serving as acting Chairman; and Kara Stein. Subsequently, Hester Peirce and Robert J. Jackson Jr. joined the Commission. In 2018, Piwowar and Stein stepped down, and Elad Roisman and Allison Lee joined the Commission in 2018 and 2019 respectively.
Chairman Clayton's initial agenda focused on the long-term interests of America's retail investors. Specific initiatives are aimed at making U.S. capital markets more accessible to businesses and investors while maintaining effective disclosure and other investor protections. He has also focused on examining and addressing equity and fixed income market structure issues, leading the formation of the SEC's Fixed Income Market Structure Advisory Committee. Clayton has expressed concern about the decline in the number of U.S. public companies and also has been outspoken on securities law issues related to distributed ledger technology, cryptocurrencies and initial coin offerings. Some predicted that he will look to encourage initial public offerings (IPOs) of companies and streamline the capital formation process by reducing the regulatory framework that applies to public companies in the United States.
Noteworthy initiatives of the Securities and Exchange Commission during Clayton's first two years as Chairman included the adoption of Regulation Best Interest and related rules, which were designed to significantly enhance the obligations financial professionals owe to retail customers, including mandatory, plain language fee and conflict disclosures. The Commission had been considering this initiative for over a decade and with increased intensity in the wake of the 2016 adoption of the "Fiduciary Rule" by the Department of Labor, which faced intense criticism and was overturned by a Federal appeals court in 2018. As part of the SEC's effort to hear directly from Main Street investors as it considered the rulemaking package, Chairman Clayton and senior SEC staff hosted roundtables around the country, including in Houston, Atlanta, Miami, Washington, Philadelphia, Denver and Baltimore.
The SEC during Chairman Clayton's tenure has also advanced a number of measures designed to facilitate capital formation. These efforts reflect Clayton's stated interest in making U.S. public capital markets more attractive for issuers and providing a more attractive set of investment opportunities for Main Street investors. The SEC under Chairman Clayton also took efforts to simplify and update disclosure requirements for public companies, including by eliminating certain requirements that were outdated, overlapping or duplicative, and proposing to streamline disclosure requirements for registered debt offerings. The SEC also requested comment on how it can reduce burdens associated with quarterly reporting while maintaining investor protections, and on July 18, 2019, it held a roundtable that discussed this topic.
A number of the SEC's capital formation initiatives under Chairman Clayton have focused on smaller businesses. In 2019, the SEC stood up a new Office for Small Business Capital Formation and announced the inaugural members of the SEC's Small Business Capital Formation Advisory Committee. For the first time in over ten years, in 2018 the SEC re-examined the threshold for public companies to qualify as "smaller reporting companies." By increasing that threshold, the SEC expanded the number of companies that could qualify for scaled disclosures and benefit from reduced compliance costs.
To facilitate the IPO process, the SEC under Chairman Clayton allowed all first-time filers and newly-public companies to submit draft registration filings to the SEC on a confidential basis. The SEC also approved applications for companies to publicly list their shares through an innovative direct listing process as an alternative to a traditional IPO. The SEC staff's work on this as well as many other capital formation projects was led by William Hinman, who Clayton named as Director of the SEC's Division of Corporation Finance.
In addition, recognizing the complexity of the regulatory framework for private securities offerings, and the fact that more than twice as much capital was raised in 2018 through the exempt offering process as compared to through registered public offerings, the SEC in 2019 issued a concept release seeking public input into how the private offering exemption framework could be harmonized.
During Clayton's tenure, the SEC's Enforcement Division has increased its focus on remedying and preventing retail investor harm. This has been reflected in efforts including the Division's Share Class Action Initiative, which required the return by investment advisers of more than $125 million in fees that were not clearly disclosed to investors. Under Clayton, the SEC's Enforcement Division also announced the creation of a new Cyber Unit and a Retail Strategy Task Force, as well as initiatives targeting those who seek to take advantage of active duty military personnel, veterans and teachers.
In 2018, Clayton tapped Commissioner Hester Peirce to lead efforts to stand up the new derivatives regulatory regime mandated by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Commissioner Elad Roisman to lead efforts to review the proxy solicitation process, including the activities of proxy advisory firms.
Professional memberships and activities
Clayton is a member of the American Bar Association, served as an Adjunct Professor at University of Pennsylvania Law School beginning in 2009, and was Chairman of the New York City Bar Committee on International Business Transactions beginning in 2010. Prior to his confirmation, Clayton served on the Executive Committee of the Metropolitan Golf Association and was formerly a board member of the Governor's Island Alliance.
Clayton has made various speeches and issued numerous public statements during his tenure as SEC Chairman, including:
- "Equity Market Structure 2019: Looking Back & Moving Forward" (with Brett Redfearn), March 8, 2019
- Remarks to the Annual Government-Business Forum on Small Business Capital Formation in Columbus, Ohio, December 12, 2018
- "SEC Rulemaking Over the Past Year, the Road Ahead and Challenges Posed by Brexit, LIBOR Transition and Cybersecurity Risks", December 6, 2018
- Remarks on Capital Formation at the Nashville 36|86 Entrepreneurship Festival, August 29, 2018
- Remarks on the Establishment of the Task Force on Market Integrity and Consumer Fraud, July 11, 2018
- "The Evolving Market for Retail Investment Services and Forward-Looking Regulation — Adding Clarity and Investor Protection while Ensuring Access and Choice", May 2, 2018
Prior to becoming SEC Chairman, Clayton's publications included:
- "We Don’t Need a Crisis to Act Unitedly Against Cyber Threats", Knowledge@Wharton, June 2015 (Co-Author)
- "USA 10-K: Why America Needs an Annual Report", Knowledge@Wharton, July 2012 (Co-Author)
- "The FCPA and its Impact on International Business Transactions – Should Anything be Done to Minimize the Consequences of the U.S.’s Unique Position on Combating Offshore Corruption?" International Business Transactions Committee, New York City Bar Association, December 2011 (Chair of the Drafting Committee)
- "US proves flexible on Sarbanes-Oxley for foreigners", International Law Review, March 2003 (Co-Author)
Clayton's wife Gretchen, whom he started dating while they attended the same Pennsylvania high school, worked at Goldman Sachs. At one point a small amount of her retirement assets (less than $1,001) was invested in an account managed by Omega Advisors. Clayton's wife resigned from her job prior to his confirmation.
- "Biography". U.S. Securities and Exchange Commission. Retrieved June 21, 2019.
- Scannell, Kara (February 6, 2017). "Wall St lawyer with skills honed by financial crisis heads to SEC". Financial Times. Retrieved June 21, 2019.
- "Jay Clayton Sworn in as Chairman of SEC". U.S. Securities and Exchange Commission. 2017. Retrieved June 21, 2019.
- Picker, Leslie (January 4, 2017). "Donald Trump Nominates Wall Street Lawyer to Head S.E.C." The New York Times. Retrieved June 21, 2019.
- "U.S. SEC chairman speaks at Ocean City H.S." Ocean City Sentinel. Retrieved 2019-07-26.
- "Nomination of Jay Clayton, page 58" (PDF). US Government Publishing Office. March 23, 2017. Retrieved June 23, 2019.
- "Jay Clayton". Sullivan & Cromwell. Archived from the original on March 3, 2017. Retrieved May 8, 2017.
- "We Don't Need a Crisis to Act Unitedly Against Cyber Threats". Knowledge@Wharton. Retrieved 2017-05-08.
- "Trump SEC pick assures that his Wall St. work not problem". AP News. Retrieved 2017-05-08.
- "Jay Clayton - Sullivan & Cromwell LLP". www.chambers.com. Retrieved 2017-05-08.
- Merle, Renae (January 4, 2017). "Trump to tap Wall Street lawyer Jay Clayton to head SEC". Washington Post.
- Protess, Ben; Goldstein, Matthew (9 March 2017). "Trump's S.E.C. Nominee Disclosure Offers Rare Glimpse of Clients and Conflicts". The New York Times. pp. A19. Retrieved 9 March 2017.
- Lovelace Jr., Berkeley (4 January 2017). "SECChairNom". CNBC. Retrieved 4 January 2017.
- "Nominations Sent to the Senate". The White House. Retrieved 2019-07-26.
- "Negotiators reach a deal to fund the federal government but deny Trump several key priorities". Los Angeles Times. ISSN 0458-3035. Retrieved 2017-05-08.
- "Senate Confirms Wall St Attorney Jay Clayton to Head SEC". The New York Times. 2017-05-02. ISSN 0362-4331. Retrieved 2017-05-08.
- "Clayton Sworn In As SEC Chairman". www.mondaq.com. Retrieved 2017-05-08.
- "Jay Clayton, Wall Street lawyer, is Trump pick to lead SEC". CNNMoney. 2017-01-04. Retrieved 2017-05-08.
- "SEC.gov | SEC Historical Summary of Chairmen and Commissioners". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | SEC Announces the Formation and First Members of Fixed Income Market Structure Advisory Committee". www.sec.gov. Retrieved 2018-03-31.
- "Wall Street Lawyer Jay Clayton Confirmed as SEC Chair". Fortune. Retrieved 2017-05-08.
- "SEC.gov | SEC Adopts Rules and Interpretations to Enhance Protections and Preserve Choice for Retail Investors in Their Relationships With Financial Professionals". www.sec.gov. Retrieved 2019-07-26.
- Bernard, Tara Siegel (2018-03-16). "Court Overturns Obama-Era Rule on Retirement Planners". The New York Times. ISSN 0362-4331. Retrieved 2019-07-26.
- "SEC.gov | SEC Chairman Clayton Announces Additional Investor Roundtable in Baltimore for Main Street Investors to 'Tell Us' About Their Investor Experience". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | Management's Discussion and Analysis of the SEC: Remarks at the "SEC Speaks" Conference". www.sec.gov. Retrieved 2019-07-26.
- Fox, Michelle (2019-04-26). "SEC Chair Jay Clayton wants big firms to go public earlier so retail investors can get in on the growth". CNBC. Retrieved 2019-07-26.
- "SEC Adopts Modernization And Simplification Of Regulation S-K". The National Law Review. Retrieved 2019-07-26.
- "SEC Adopts Amendments to Modernize and Simplify Disclosure Requirements". The National Law Review. Retrieved 2019-07-26.
- EY: To the Point, SEC proposes streamlining disclosure requirements for certain registered debt offerings, at https://www.ey.com/publication/vwluassetsdld/tothepoint_04074-181us_rule3-10rule3-16_26july2018/$file/tothepoint_04074-181us_rule3-10rule3-16_26july2018.pdf?OpenElement
- "SEC.gov | Statement Announcing SEC Staff Roundtable on Short-Term / Long-Term Management of Public Companies, Our Periodic Reporting System and Regulatory Requirements". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | A Start-Up Within the Government: Introducing the SEC's Office of the Advocate for Small Business Capital Formation". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | SEC Announces Members of Small Business Capital Formation Advisory Committee". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | SEC Expands the Scope of Smaller Public Companies that Qualify for Scaled Disclosures". www.sec.gov. Retrieved 2019-07-26.
- "All companies can use 'confidential filing' IPO process now". TechCrunch. Retrieved 2019-07-26.
- Osipovich, Maureen Farrell and Alexander. "Bankers Begone! Spotify to Get Clearance for an 'Underwriter-Less' IPO". WSJ. Retrieved 2019-07-26.
- "SEC.gov | William Hinman Named Director of Division of Corporation Finance". www.sec.gov. Retrieved 2019-07-26.
- SEC Concept Release on Harmonization of Securities Offering Exemptions, p. 16, at https://www.sec.gov/rules/concept/2019/33-10649.pdf
- "SEC.gov | SEC Seeks Public Comment on Ways to Harmonize Private Securities Offering Exemptions". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | SEC Enforcement Division Issues Report on FY 2018 Results". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | SEC Share Class Initiative Returning More Than $125 Million to Investors". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | SEC Announces Enforcement Initiatives to Combat Cyber-Based Threats and Protect Retail Investors". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | SEC Announces Enforcement and Investor Education Initiatives to Protect Teachers and Military Service Members". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | Why and Whither Title VII?: Remarks before the 2018 ISDA Annual North America Conference". www.sec.gov. Retrieved 2019-07-26.
- "SEC.gov | Remarks for Telephone Call with SEC Investor Advisory Committee Members". www.sec.gov. Retrieved 2019-07-26.
- "Sullivan elected MGA President; Hagestad, Roberts honored at Annual Meeting". Metropolitan Golf Association Association. 2017-01-22. Retrieved 2018-03-31.
Mary Jo White
| Chair of the Securities and Exchange Commission