Jay Clayton: Trump Nominates SEC Chairman as U.S. Attorney

Jay Clayton

Getty Jay Clayton, Chairman and the Securities and Exchange Commission testifies during a Senate Appropriations Subcommittee hearing on Capitol Hill May 8, 2019 in Washington, DC.

Walter Joseph “Jay” Clayton III is the Chairman of the U.S. Securities and Exchange Commission. President Donald Trump recently nominated the Virginia native to serve as U.S. attorney for the Southern District of New York.

Attorney General William Barr announced in a press release Friday that the SEC chairman will accept the president’s nomination and start his new role on July 3.

The office is at the “forefront of many important areas of criminal law enforcement,” according to its website, including terrorism, white collar and cyber crime, mortgage fraud, organized crime and civil rights violations, among others areas.

“For the past three years, Jay has been an extraordinarily successful SEC Chairman, overseeing efforts to modernize regulation of the capital markets, protect Main Street investors, enhance American competitiveness, and address challenges ranging from cybersecurity issues to the COVID-19 pandemic,” Barr expressed in the statement.

Although the release claimed current SDNY U.S. Attorney Geoffrey Berman would be stepping down — he said otherwise in an updated statement.

Berman took to Twitter to explain that he had only heard news of his retirement through the press report.

“I have not resigned, and have no intention of resigning, my position, to which I was appointed by the Judges of the United States District Court for the Southern District of New York,” Berman wrote.

CNBC reported that Berman is currently investigating Trump’s personal lawyer, Rudy Giuliani, for financial dealings tied to Ukraine.

Barr’s statement did not clarify who will take over Clayton’s role as head of the SEC.

Here’s what you need to know about Jay Clayton:


1. Before Entering the SEC, Clayton was a ‘Well-Connected’ Lawyer

jay clayton

GettySecurities and Exchange Chairman Jay Clayton awaits the start of a hearing on Capitol Hill September 2019 in Washington, DC.

According to SIFMA, Clayton is a member of the New York and Washington, D.C. bars and earned degrees in engineering, economics, and law.

He received a B.S. in Engineering from the University of Pennsylvania, a B.A. and M.A. in Economics from the University of Cambridge and a J.D. from the University of Pennsylvania Law School, the website adds.

Prior to his role at the Commission, Clayton was a partner at Sullivan & Cromwell LLP for over 20 years. Politico reported that Clayton was a “well-connected Wall Street lawyer who represented and advised a number of major companies, including Goldman Sachs, Barclays, Deutsche Bank and UBS.”

The attorney worked with numerous public and private companies on matters like securities offerings, mergers, corporate governance and regulatory and enforcement proceedings.


2. Clayton had a hand in Regulating the ‘Peak’ of the ‘Coin Offering Bubble’

bit coin

GettyRipple and ethereum cryptocurrency ‘altcoins’ sit arranged for a photograph.

With a vote of 61 to 37, Clayton was nominated as Chairman of the SEC by the U.S. Senate on May 2, 2017. He was officially sworn in two days later.

Clayton oversaw the independent agency during the “peak of the initial coin offering bubble and much of the aftermath,” according to Coin Desk.

The chair spoke on the regulator’s “approach to the crypto space,” the site continues, including “raising questions about the bitcoin market’s ability to be manipulated, size and custody solutions.

“We have to get to a place, in my view — just speaking for myself — we have to get to a place that we can be confident that trading is better regulated,” he said last September, Coin Desk reported.

The SDNY has also been a key player in the crypto space. The office prosecuted a handful of cases against “allegedly fraudulent crypto projects,” Coin Desk explained.

Jake Chervinsky, who serves as general counsel at Compound, noted on Twitter the significance of Clayton’s announcement.

The Georgetown University Law Center adjunct professor wrote, ‘The SEC chair is one of the most important U.S. officials for crypto regulation. Chairman Clayton’s replacement will have a massive impact on the industry…clarity on a wide range of issues for years to come hangs in the balance.”


3. Clayton Would be the First Non-Prosecutor to Lead SDNY

clayton

GettyJay Claton is sworn in before the Senate Banking Committee during his confirmation hearing to be chairman of the Securities and Exchange Commission in the Dirksen Senate Office Building on Capitol Hill.

Clayton has not previously worked as a prosecutor, according to CNBC, making him the first non-prosecutor to lead the SDNY if confirmed.

Aside from Berman, who served as an Assistant United States Attorney from 1990 to 1994, previous title holders include Joon Kim, Preet Bharara and Michael Garcia. All have documented experience as prosecutors.

During his tenure as an Assistant U.S. Attorney, Berman maneuvered “complex criminal prosecutions, including prosecutions for violations of the tax and securities laws and for computer hacking,” his SDNY bio reads.

He also worked as an Associate Counsel in the Office of Independent Counsel leading up to his assistant position. Berman “successfully prosecuted a former CIA employee for tax fraud” in relation to the Iran/Contra matter, the web page claims.


4. Berman Is Refusing to Step Down Until Clayton is Confirmed by the Senate

Berman

GettyGeoffrey Berman, U.S. Attorney for the Southern District of New York, speaks during a press conference at the U.S. Attorneys office of Southern District of New York on October 10, 2019.

The current attorney general said he will continue his investigations until Clayton is officially confirmed by the Senate.

“Our investigations will move forward without delay or interruption,” he wrote in a statement. “I cherish every day that I work with the men and women of this Office to pursue justice without fear or favor – and intend to ensure that this Office’s important cases continue unimpeded.”

The unique dispute involves “high stakes,” CBNBC reported, as Berman has prosecuted a number of Trump associates, including former personal lawyer and fixer Michael Cohen.

Cohen garnered national attention when he was convicted for lying to Congress and campaign finance crimes, USA Today disclosed.


5. Clayton has Made Numerous Notable Speeches and Lectures During his Tenure as SEC Chairman

jay c

GettySecurities and Exchange Commission (SEC) chairman Jay Clayton speaks at Stanford University Rock Center for Corporate Governance on January 24, 2018 in Stanford, California.

His list of work includes “Equity Market Structure 2019: Looking Back & Moving Forward,” which was a keynote address at Fordham University and “SEC Rulemaking Over the Past Year, the Road Ahead and Challenges Posed by Brexit, LIBOR Transition and Cybersecurity Risks,” another speech.

Clayton was also an Adjunct Professor at the University of Pennsylvania Law School from 2009 to 2017, according to his faculty page.

He taught “M&A Through the Business Cycle” each spring, SIFMA claims, and guest lectured in other classes as well as at other institutions.

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