The Senate confirmed Jay Clayton to be the SEC’s next chairman by a vote of 61-37. The confirmation vote followed yesterday’s cloture vote of 60-36 that procedurally cleared the path to formal approval of Clayton to lead the SEC.
Senate Banking Committee Chairman Mike Crapo (R-Idaho) returned to the floor to reiterate his support for Clayton. Crapo emphasized that the 15-8 banking committee vote had bipartisan backing and he expressed his "confidence" in Clayton’s ability to lead the SEC. Yesterday, Crapo told members that Clayton would pursue an agenda that could help to grow and create jobs while also explaining that conflicts of interest are not a new issue for SEC commissioners. At this confirmation hearing, Clayton had pledged he would not play favorites as head of the SEC.
While no senator seriously questioned Clayton’s abilities, some senators who opposed his nomination worried about the philosophical direction the SEC may take under his leadership. They also reiterated concerns about the similarities between Clayton and his immediate predecessor Mary Jo White: both came to the agency from private practice and Clayton, like White, is potentially limited in enforcement matters due to conflicts of interest developed while in private law practice.
Ranking Member Sherrod Brown (D-Ohio) said "Americans deserve a Chair who will run the SEC on their behalf, not for the benefit of Wall Street banks and big corporations." Brown said Clayton may weaken corporate governance and investor protection rules, while also having to recuse himself from too many enforcement matters due to his private legal work. Brown said it would be a "mistake" to repeat Senate’s error in confirming White who also had many conflicts from her private practice.
Earlier in the day, Sen. Bob Menendez (D-NJ) argued even more forcefully against Clayton and the Trump Administration’s financial regulatory policies. According to Menendez, the Clayton nomination exemplified a "misguided belief" that the U.S. economy prospers when banks are free of restrains and corporate executives can get outsized paychecks. Menendez said the Trump Administration’s executive orders on finance rules do nothing for workers, but they may roll-back gains for students and consumers and diminish industry oversight. Menendez asked rhetorically, "Is it time to go easy on Wall Street?"
With respect to Clayton, Menendez said the SEC is the financial cop on the beat but that Clayton had made a career out of defending Wall Street offenders. Menendez summed up his opposition to Clayton: too much emphasis on corporations’ bottom lines; too many conflicts of interest; and too few answers to substantive questions during his confirmation hearing.
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