|32nd Chairman of the Securities and Exchange Commission|
May 4, 2017
|Mary Jo White|
Walter Joseph Clayton III
July 11, 1966
Newport News, Virginia, U.S.
|Spouse(s)||Gretchen Butler Clayton|
University of Pennsylvania (BS, JD)
University of Cambridge (BA, MA)
Walter Joseph "Jay" Clayton III (born July 11, 1966) is an American attorney and Chairman of the U.S. Securities and Exchange Commission.
Clayton was born at Fort Eustis in Newport News, Virginia. He grew up near Hershey, Pennsylvania, where his father worked for the local chocolate company, and Wallingford, Pennsylvania. Clayton graduated from Strath Haven High School in 1984. After attending Lafayette College, where he was a member of the soccer team, Clayton transferred and received his Bachelor of Science in Engineering from the University of Pennsylvania in 1988 (summa cum laude), and received the Thouron Award for post-graduate study in the United Kingdom. He received a Bachelor of Arts and Master of Arts in economics from the University of Cambridge in 1990, where he captained the University of Cambridge basketball team. He earned his Juris Doctor from the University of Pennsylvania Law School in 1993 (cum laude and Order of the Coif).
During college and graduate school, Clayton was a member of the Ocean City Beach Patrol, an intern with the U.S. Attorney's Office in Philadelphia and the U.S. House of Representatives, and an employee of United Engineers and Constructors.
From 1993 to 1995, Clayton clerked for Judge Marvin Katz of the District Court for the Eastern District of Pennsylvania.
After being a summer associate at the firm in the summer of 1992, Clayton joined Sullivan & Cromwell full-time in October 1995 and became a partner in January 2001. At Sullivan & Cromwell, Clayton was a member of the firm's management committee and co-managing partner of the firm's General Practice Group. He specialized in mergers and acquisitions transactions and capital markets offerings and represented prominent Wall Street firms, including Goldman Sachs. He served as an adviser to numerous companies regarding issues related to the SEC, Federal Reserve, Department of Justice, and other agencies.
He has also helped multiple corporations raise money through initial public offerings, including Alibaba Group,Ally Financial, Och-Ziff Capital Management, Oaktree Capital Management, Blackhawk Network Holdings, and Moelis & Company. During the financial crisis of 2007-2008, Clayton advised Bear Stearns in its fire sale to JPMorgan Chase in 2007, Barclays Capital in the purchase of Lehman Brothers' assets following their bankruptcy, and Goldman Sachs in connection with the investment by Berkshire Hathaway.
Clayton disclosed to the U.S. Office of Government Ethics that his other corporate clients had included TeliaSonera AB, Ally Financial, Deutsche Bank, UBS, Volkswagen, SoftBank Group, The Weinstein Company, Pershing Square Capital Management, and Valeant Pharmaceuticals. Clayton's individual clients included Ocwen's former head William Erbey, Paul Tudor Jones, former Attorney General of Ireland Peter Southerland, CDW founder Michael Krasny and LinkedIn founder Reid Hoffman.
Clayton earned $7.6 million in 2016 from his firm and has a family wealth of at least $50 million. A substantial portion of his holdings were in mutual funds of the Vanguard Group. His investments also included private funds managed by Apollo Global Management, Bain Capital, J.C. Flowers & Co., and Richard C. Perry but he divested these investments upon confirmation.
On January 4, 2017, President-elect Donald Trump announced his intention to nominate Clayton to be SEC Chairman, and he was nominated on Inauguration Day, January 20, 2017. Clayton's nomination was endorsed by Manhattan District Attorney Cyrus Vance Jr. U.S. Senator Catherine Cortez Masto, a Democrat representing Nevada, expressed concern that Clayton represented Swedish firm TeliaSonera in a proposed venture that would combine Russian telecommunications companies MegaFon and Altimo. Clayton is not thought to have any ties to the Russian companies. On April 4, 2017, the Senate Banking Committee voted 15-8 to take Clayton's nomination to the full Senate, with three Democrats voting in favor of Clayton.
On May 2, 2017, the U.S. Senate voted 61-37 to confirm Clayton as Chairman of the SEC. Votes cast in favor of Clayton's confirmation included nine Democrats and one Independent alongside 51 Republican votes. On May 4, 2017, Clayton was sworn in, marking the official beginning of his role as Chairman.
In connection with the nomination of Clayton in January, President Trump said in a statement that "[w]e need to undo many regulations which have stifled investment in American businesses, and restore oversight of the financial industry in a way that does not harm American workers." Upon Clayton's swearing-in, the SEC Commission consisted of Clayton; Michael Piwowar, who was serving as acting Chairman; and Kara Stein. Subsequently, Hester Peirce and Robert J. Jackson Jr. joined the Commission. In 2018, Piwowar and Stein stepped down, and Elad Roisman and Allison Lee joined the Commission in 2018 and 2019 respectively.
Chairman Clayton's initial agenda focused on the long-term interests of America's retail investors. Specific initiatives are aimed at making U.S. capital markets more accessible to businesses and investors while maintaining effective disclosure and other investor protections. He has also focused on examining and addressing equity and fixed income market structure issues, leading the formation of the SEC's Fixed Income Market Structure Advisory Committee. Clayton has expressed concern about the decline in the number of U.S. public companies and also has been outspoken on securities law issues related to distributed ledger technology, cryptocurrencies and initial coin offerings. Some predicted that he will look to encourage initial public offerings (IPOs) of companies and streamline the capital formation process by reducing the regulatory framework that applies to public companies in the United States.
Noteworthy initiatives of the Securities and Exchange Commission during Clayton's first two years as Chairman included the adoption of Regulation Best Interest and related rules, which were designed to significantly enhance the obligations financial professionals owe to retail customers, including mandatory, plain language fee and conflict disclosures. The Commission had been considering this initiative for over a decade and with increased intensity in the wake of the 2016 adoption of the "Fiduciary Rule" by the Department of Labor, which faced intense criticism and was overturned by a Federal appeals court in 2018. As part of the SEC's effort to hear directly from Main Street investors as it considered the rulemaking package, Chairman Clayton and senior SEC staff hosted roundtables around the country, including in Houston, Atlanta, Miami, Washington, Philadelphia, Denver and Baltimore.
The SEC during Chairman Clayton's tenure has also advanced a number of measures designed to facilitate capital formation. These efforts reflect Clayton's stated interest in making U.S. public capital markets more attractive for issuers and providing a more attractive set of investment opportunities for Main Street investors. The SEC under Chairman Clayton also took efforts to simplify and update disclosure requirements for public companies, including by eliminating certain requirements that were outdated, overlapping or duplicative, and proposing to streamline disclosure requirements for registered debt offerings. The SEC also requested comment on how it can reduce burdens associated with quarterly reporting while maintaining investor protections, and on July 18, 2019, it held a roundtable that discussed this topic.
A number of the SEC's capital formation initiatives under Chairman Clayton have focused on smaller businesses. In 2019, the SEC stood up a new Office for Small Business Capital Formation and announced the inaugural members of the SEC's Small Business Capital Formation Advisory Committee. For the first time in over ten years, in 2018 the SEC re-examined the threshold for public companies to qualify as "smaller reporting companies." By increasing that threshold, the SEC expanded the number of companies that could qualify for scaled disclosures and benefit from reduced compliance costs.
To facilitate the IPO process, the SEC under Chairman Clayton allowed all first-time filers and newly-public companies to submit draft registration filings to the SEC on a confidential basis. The SEC also approved applications for companies to publicly list their shares through an innovative direct listing process as an alternative to a traditional IPO. The SEC staff's work on this as well as many other capital formation projects was led by William Hinman, who Clayton named as Director of the SEC's Division of Corporation Finance.
In addition, recognizing the complexity of the regulatory framework for private securities offerings, and the fact that more than twice as much capital was raised in 2018 through the exempt offering process as compared to through registered public offerings, the SEC in 2019 issued a concept release seeking public input into how the private offering exemption framework could be harmonized.
During Clayton's tenure, the SEC's Enforcement Division has increased its focus on remedying and preventing retail investor harm. This has been reflected in efforts including the Division's Share Class Action Initiative, which required the return by investment advisers of more than $125 million in fees that were not clearly disclosed to investors. Under Clayton, the SEC's Enforcement Division also announced the creation of a new Cyber Unit and a Retail Strategy Task Force, as well as initiatives targeting those who seek to take advantage of active duty military personnel, veterans and teachers.
In 2018, Clayton tapped Commissioner Hester Peirce to lead efforts to stand up the new derivatives regulatory regime mandated by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Commissioner Elad Roisman to lead efforts to review the proxy solicitation process, including the activities of proxy advisory firms.
Clayton is a member of the American Bar Association, served as an Adjunct Professor at University of Pennsylvania Law School beginning in 2009, and was Chairman of the New York City Bar Committee on International Business Transactions beginning in 2010. Prior to his confirmation, Clayton served on the Executive Committee of the Metropolitan Golf Association and was formerly a board member of the Governor's Island Alliance.
Clayton has made various speeches and issued numerous public statements during his tenure as SEC Chairman, including:
Prior to becoming SEC Chairman, Clayton's publications included:
Clayton's wife Gretchen, whom he started dating while they attended the same Pennsylvania high school, worked at Goldman Sachs. At one point a small amount of her retirement assets (less than $1,001) was invested in an account managed by Omega Advisors. Clayton's wife resigned from her job prior to his confirmation.