Wall Street’s sheriff is hanging up his spurs.
Securities and Exchange Commission Chairman Jay Clayton announced Monday morning that he will be stepping down at the end of 2020, ending a three-and-half year term that saw the SEC collect $14 billion in fines from Wall Street wrongdoers. That figure includes the $4.68 billion that the commission has collected in 2020 so far, already a record for a fiscal year.
Nevertheless, the SEC under Clayton has been criticized for being drastically understaffed and overly chummy with the financiers it is tasked with policing.
Clayton’s attempt to exempt asset managers to report what they were holding was scrapped after it was met with withering criticism from proponents for market transparency. Meanwhile, he still pushing to drastically loosen the definition of an “accredited investor” in a move that would enlarge the pool of investors that hedge funders can tap for cash.
Clayton also raised eyebrows by lowering the payout to whistleblowers after the SEC its first-ever annual decline in tips from corporate canaries in 2019.
But Clayton does have some big trophies hanging on his office wall. In addition to being the first SEC chairman to reckon with a more automated market and the explosion of no-fee trading apps like Robinhood, Clayton has publicly tangled with unusual targets including Elon Musk.
After Musk goosed Tesla shares with a misleading tweet that said he was thinking of taking the electric-car maker private, Clayton moved to muzzle the eccentric billionaire, fining him $20 million and forcing him to surrender the chairman role at Tesla.
On Oct. 22, the SEC took a $400 million chunk from Goldman Sachs’ record-setting $2.9 billion fine stemming from the 1MDB Malaysian fraud scandal.
On Friday, Clayton’s team announced that it has slapped two senior Wells Fargo executives with even more charges and fines for their roles in the fraudulent account scandal that rocked the bank in the summer of 2016. Much of Wells Fargo’s multi-billion dollar punishment has been meted out by Clayton.
The SEC has also been active in going bankers and businessmen that have defrauded the coronavirus bailout by filing false claims with the Paycheck Protection Program.
Clayton made headlines in June when Trump nominated him to replace US Attorney for the Southern District of New York Geoffrey Berman after Attorney General Bill Barr appeared to fire Berman via a press release.
But Clayton is likely to have a busy final few weeks at the helm of the SEC. Wall Street bankers with regulatory issues are looking to settle their accounts under a Trump administration rather than risk paying more under an even less-friendly Biden White House.
Like other presidential appointees, the SEC chairman often steps aside at the end of a president’s term and Clayton, with his strong Wall Street ties, is very unlikely to be considered by the incoming Biden administration.
Clayton, 54, is a former partner at New York law firm Sullivan & Cromwell who represented clients like Bill Ackman, Paul Tudor Jones and Goldman Sachs.
He was nominated to run the SEC by President Trump in January 2017 and confirmed by the Senate that May. His wife, Gretchen Butler Clayton, was a Goldman Sachs vice president who stepped down from the megabank after 17 years when Clayton was confirmed.
“Working alongside the incredibly talented and driven women and men of the SEC has been the highlight of my career,” Clayton said in a statement. “I am proud of our collective efforts to advance each part of the SEC’s tripartite mission, always with an eye on the interests of our Main Street investors.”