Business

After ripping Wall Street, Trump taps insider to police it

Published: 4:00 AM, January 6, 2017

WASHINGTON — Mr Donald Trump assailed Wall Street on the campaign trail, and frequently criticised his political opponents for their ties to Goldman Sachs Group. Now, Mr Trump is relying on a lawyer who has spent his career representing financial firms, and has his own close ties to Goldman, to lead Wall Street’s top regulator.

Mr Trump will pick Sullivan & Cromwell partner Jay Clayton to run the Securities and Exchange Commission, said the President-elect’s transition team in a statement on Wednesday. Mr Clayton’s clients represent a virtual who’s who list of industry titans, including hedge funds, private equity firms and Goldman, where his wife has worked for about two decades.

Still, Mr Trump’s advisers said Mr Clayton has the experience to provide “strong oversight” of financial firms while helping the incoming president do away with regulations that have stifled job growth.

“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,” said Mr Trump in the statement. “We 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.”

Mr Clayton’s expected nomination continues a surprise coup for financial firms since Mr Trump won the presidency in November. While Mr Trump attacked Wall Street during his run, and many bankers supported Mrs Hillary Clinton’s candidacy, the President-elect has tapped a number of industry insiders for key posts.

His picks include former Goldman partner Steven Mnuchin to be Treasury Secretary, former Goldman president Gary Cohn for the top White House economic post and billionaire investor Wilbur Ross to lead the Commerce Department.

Mr Clayton, 50, represented Goldman in connection with the US$10 billion (S$14.3 billion) bailout it received in 2008 as part of the government’s US$700 billion rescue of banks during the financial crisis, as well as a US$5 billion investment by Mr Warren Buffett’s Berkshire Hathaway in Goldman, according to Sullivan & Cromwell’s website. Other clients have included Och-Ziff Capital Management Group. Much of his legal work involved mergers and acquisitions, as well as representing firms facing US investigations.

“We are going to work together with key stakeholders in the financial system to make sure we provide investors and our companies with the confidence to invest together in America,” said Mr Clayton in the statement. “We will carefully monitor our financial sector, as we set policy that encourages American companies to do what they do best: Create jobs.”

If confirmed by the Senate, Mr Clayton would replace Ms Mary Jo White, who has said she will step down as SEC chair when President Barack Obama leaves office later this month.

While Mr Clayton’s Wall Street connections are obvious, his political leanings are less clear. Voter registration records list him as having no party affiliation. His political contributions consist of a US$1,000 donation given in 2013 to the campaign committee of Delaware Attorney General Beau Biden, the late son of Democratic Vice-President Joe Biden, according to the National Institute on Money in State Politics.

For years, the SEC’s agenda has been largely dictated by implementing rules required under the 2010 Dodd-Frank Act, the sweeping legislation Congress passed in response to the financial crisis. Mr Trump’s transition team has promised to dismantle the law. BLOOMBERG