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REGULATION/LEGISLATION

SEC chairman nominee to review Dodd-Frank, but lacks specific plan

Jay Clayton
Jay Clayton

In a confirmation hearing before the Senate Banking Committee Thursday, Jay Clayton, SEC chairman nominee, said he does not have “specific plans for attacking a particular provision” of the Dodd-Frank Wall Street Reform and Consumer Protection Act, but that the act should be reviewed.

Pointing to President Donald Trump and National Economic Council Director Gary Cohn’s comments about rolling back Dodd-Frank, Sen. Sherrod Brown, D-Ohio, asked Mr. Clayton during Thursday’s hearing what aspect of Dodd-Frank he will be “attacking,” to which Mr. Clayton replied: “I don’t have any specific plans for attacks, senator. I do believe that Dodd-Frank should be looked at, in particular, rules that have been in place as to whether they are achieving their objectives effectively, but I have no specific plans for attacking a particular provision of Dodd-Frank.”

Later in the hearing, Sen. Elizabeth Warren, D-Mass., argued that Mr. Clayton, a former partner at major Wall Street law firm Sullivan & Cromwell, would be forced to recuse himself from cases involving big banks such as Goldman Sachs, Deutsche Bank, Barclays and UBS, which could result in more cases with deadlock and weaker enforcement.

“With you, Wall Street can breathe a little easier knowing that you won’t be voting against them, and there’s likely to be weaker enforcement,” Ms. Warren said, noting without Mr. Clayton’s vote, a potentially even split of Democratic and Republican commissioners could be casting the remaining votes.

Mr. Clayton’s practice has included advising on public and private mergers and acquisitions transactions, capital markets offerings, regulatory and enforcement proceedings, and other matters.

“Holding Wall Street firms accountable is a major job of the SEC’s mission, and the SEC chair needs to be able to participate in those enforcements actions, to be the cop on the beat for the American people, not on the sidelines when former clients and Wall Street firms are able to skate free, and I think that raises a very serious concern about your nomination,” Ms. Warren said.