Trump's SEC pick: more capital formation than enforcement

With his selection of deal-making attorney Walter "Jay" Clayton to head the US Securities and Exchange Commission, President-elect Donald Trump is signaling that the agency will try to reduce regulations that critics see as burdensome or hindering corporate growth.

Trump announced on Wednesday that he intends to nominate Clayton, a partner in the New York office of law firm Sullivan & Cromwell, to lead the agency that polices and regulates Wall Street.

Clayton specializes in public and private mergers and acquisitions and capital-raising efforts, and notably worked on the initial public offering of Alibaba Group Holding Company.

He also helps companies navigate regulatory and enforcement actions, including a number of cases that involved mortgage securities. At least two clients that Clayton has represented - Alibaba and Ally Financial - have both disclosed in recent years that they are being investigated by the SEC; it is not clear whether either review has been concluded.

"Jay Clayton is a highly talented expert on many aspects of financial and regulatory law, and he will ensure our financial institutions can thrive and create jobs while playing by the rules at the same time," Trump said in a statement.

Clayton did not immediately respond to a request for comment, but in a statement released by the Twrump transition team, he pledged to ensure investors and companies have confidence to invest in America.

Many Republicans in recent years have criticized the SEC for focusing too much on enforcement, especially under outgoing chair Mary Jo White, a former federal prosecutor, and not enough on its other missions, including writing rules that promote capital formation.

Legal experts said Clayton's background is more in line with some past SEC chiefs, and points to less regulation and perhaps a shift away from White's policy in which the agency fined firms for smaller violations in an effort to deter bigger ones.

Clayton's background representing Wall Street firms is likely to come up during his Senate confirmation hearing.

"It's hard to see how an attorney who's spent his career helping Wall Street beat the rap will keep President-elect Trump's promise to stop big banks and hedge funds from 'getting away with murder,'" said Senate banking committee ranking member Sherrod Brown.