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By Sarah N. Lynch
WASHINGTON, March 23 Jay Clayton, the Wall
Street attorney tapped by President Donald Trump to lead the
U.S. Securities and Exchange Commission, will face questions on
his vision for the agency at his confirmation hearing on
Thursday before the Senate Banking Committee.
A partner at Sullivan & Cromwell who is not registered with
any political party, Clayton has worked on high-profile initial
public offerings like Alibaba Group Holding Inc and is
widely expected to focus his efforts on ways the SEC can foster
economic growth and help companies raise capital.
Clayton will pledge to be tough on fraudsters in his opening
statement to the committee, according to his prepared remarks.
"Bad actors undermine the hard-earned confidence that is
essential to the efficient operation of our capital markets," he
plans to say.
The SEC enforces securities laws and regulates U.S. stock,
options and bond markets.
Clayton is expected to win confirmation easily. But he can
expect sharp questioning from Democrats such as Senator
Elizabeth Warren of Massachusetts, who is expected to ask about
his professional ties to Wall Street, particularly with Goldman
Sachs, a bank he represented during the financial crisis
and that employs his wife, Gretchen.
Clayton's client list has included Barclays,
Deutsche Bank and the Royal Bank of Canada,
as well as Bill Ackman's hedge fund Pershing Square Capital
Management, and William Erbey, former executive chairman of
mortgage servicer Ocwen Financial Corp, who was forced
to resign as part of a settlement stemming from an investigation
into improper foreclosures.
Clayton will recuse himself from matters in which he has a
financial interest, according to his disclosures with the Office
of Government Ethics.
His wife is expected to resign her post at Goldman if he is
confirmed by the full Senate.
Committee Republicans led by Chairman Mike Crapo of Idaho
are likely to press Clayton for some of his ideas on how to
engender capital formation, a goal the Trump administration has
Cindy Fornelli, executive director at the Center for Audit
Quality, a nonprofit whose board includes corporate chief
executives and audit firms, said she hoped Clayton would
continue a project started by his predecessor, Mary Jo White, to
streamline corporate disclosures.
"I would be surprised if he didn't," she told Reuters in an
interview before the hearing. "He is a transactional lawyer and
knows very well the complexities and arcane nature of our
(Reporting by Sarah N. Lynch; Editing by Linda Stern and Peter