(Adds details about assets, clients)
By Amanda Becker
WASHINGTON, March 8 Wall Street attorney Jay
Clayton will recuse himself from matters involving Barclays
Bank, Deutsche Bank AG and other clients he has recently
represented if confirmed to head the U.S. Securities and
Exchange Commission under the terms of an ethics agreement
disclosed on Wednesday.
Barclays Bank, Deutsche Bank AG, UBS
Securities, Royal Bank of Canada, Ally Financial and Pershing
Square were among the financial firms listed as Clayton's
clients at Sullivan & Cromwell, according to a form filed with
the Office of Government Ethics.
Under the agreement, Clayton 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.
The SEC currently has only two members - Republican Michael
Piwowar and Democrat Kara Stein - and they often disagree about
policy matters. Should Clayton be confirmed and then recuse
himself, the agency will be left deadlocked until other
commissioners are nominated and confirmed. At full force, the
SEC has five voting members, including the chair.
Clayton also promised to divest, within 90 days of
confirmation, some 176 assets collectively worth millions of
dollars. He did not reply to a request for comment.
Clayton and his wife, Gretchen Butler Clayton, reported
assets between $52.3 million and $130.4 million. Because
nominees for Executive Branch positions report their assets in
broad ranges, it is impossible to calculate a nominee's exact
He has assets related to his employment at Sullivan &
Cromwell worth between $2.5 million and $8.4 million, the OGE
form shows. His wife works at Goldman Sachs & Co, and
has assets related to her role at the investment bank worth
between $1.1 million and $2.8 million. She has said she will
resign her job if he is confirmed.
The form also does not detail the specific assets from which
Clayton will divest to comply with federal ethics laws. But in
his March 3 letter to an ethics officer, Clayton did indicate
that 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, potentially
saving him millions of dollars.
As a Wall Street attorney, Clayton has worked on notable
deals including the initial public offering of Alibaba Group
Holding Ltd. Valeant Pharmaceuticals, the
subject of federal investigations related to drug pricing, was
listed as one of his clients. Clayton also reported having two
corporate clients he could not name due to pending
investigations that are not yet public.
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.
(Reporting By Amanda Becker; Editing by Tom Brown, Bernard Orr)