SEC nominee Clayton vows separation from his Wall Street law firm

Reuters News
Posted: Mar 08, 2017 11:46 AM

By Amanda Becker

WASHINGTON (Reuters) - Wall Street attorney Jay Clayton, President Donald Trump's pick to head the U.S. Securities and Exchange Commission, has vowed to recuse himself from agency matters involving his law firm and former clients, according to an ethics agreement made public on Wednesday.

Under the agreement, the Sullivan & Cromwell attorney will not participate in SEC matters involving the firm for one year. He will also recuse himself from matters involving his former clients for one year after he last provided them legal services.

Clayton also promised to divest, within 90 days of confirmation, from 176 assets collectively worth millions of dollars.

Clayton indicated he will seek to take advantage of a tax benefit that allows government officials to defer paying capital gains taxes on assets they sell to satisfy ethics requirements, according to a March 3 letter Clayton wrote to ethics officials.

As a Wall Street attorney, Clayton has worked on notable deals including the initial public offering of Alibaba Group Holding Ltd.

The SEC is an independent federal agency tasked with enforcing securities laws and regulating the country's stock and options exchanges. Agency nominees are reviewed by the U.S. Senate Banking Committee, which is set to hold Clayton's initial confirmation hearing on March 23.

Clayton is widely expected by SEC watchers to win confirmation by the full Senate by a comfortable margin. But he is likely to face grilling by some of the more liberal-leaning Democrats on the banking panel.

Senator Sherrod Brown of Ohio is the senior Democrat on the committee. Senator Elizabeth Warren of Massachusetts also serves on the panel. Both are skeptical that people with close ties to Wall Street should run the SEC.

Clayton's wife, Gretchen Butler Clayton, works at Goldman Sachs & Co and holds stock, restricted stock and restricted stock units in the bank. Those assets will also be divested if Clayton is confirmed to head the SEC.

(Reporting By Amanda Becker; Editing by Tom Brown)