SEC’s Clayton will depart as chairman at end of 2020

Securities and Exchange Commission (SEC) Chairman Jay Clayton announced Monday that he will step down at the end of 2020, creating a key financial regulatory vacancy shortly before President-elect Joe Biden is set to take office.

Clayton will leave the SEC with roughly 18 months left in his term as chief of the federal government’s stock market and securities industry regulator. 

“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.”

A registered independent, Clayton was nominated by President Trump in January 2017 and confirmed to lead the SEC in May of that year. He was a partner at law firm Sullivan & Cromwell in New York before joining the commission, specializing in major corporate mergers and acquisitions.

Clayton’s departure could give Trump a narrow window to appoint and confirm a replacement before the president is set to leave office on Jan. 20. If Trump and Republicans are unable to coalesce around a new chairman, or if Democrats capture control of the Senate after Georgia’s runoff elections, Biden will likely take office with the chance to appoint a new commissioner and Democratic chairman.

Clayton’s announcement comes several months after he sought to leave the SEC and return home as the U.S. Attorney for New York’s Southern District. After Clayton discussed the matter with Trump and Attorney General William Barr, the president nominated him for the role in June after firing then-U.S. Attorney Geoffrey Berman.

Clayton told lawmakers the following week that he expressed interest in the position and in returning to New York, but declined to say whether he knew Berman would be fired so he could replace him. The scandal surrounding Clayton’s nomination and doubt about his qualifications to serve as prosecutor effectively killed his chance at confirmation.

Clayton’s nomination to serve as U.S. attorney was a rare moment of political backlash for an official who had been largely seen as a consensus-seeking, mild-mannered regulator. He has prioritized regulatory rollbacks intended to incentivize more stock offerings, simplifying and modernizing corporate disclosures, and cracking down on investment schemes targeting average investors.

“Thanks to the hard work of the diverse and inclusive SEC team, we have improved investor protections, promoted capital formation for small and larger businesses, and enabled our markets to function more transparently and efficiently,” Clayton said on Monday.