Depending on whom you choose to believe, Sullivan and Cromwell partner Jay Clayton is either a smart and experienced member of the securities industry elite or simply a shill for Wall Street. I doubt Senators Crapo and Warren will see eye to eye on this, now or ever. Clayton’s client list reads like a Who’s Who of full-contact Wall Street finance and the Goldman Sachs conspiracy theorists are burning a hole in Twitter. Personally, I’m more hopeful. The one thing I know we do NOT need is more trigger-happy, “stop-and-frisk” prosecutors running an administrative agency.
If I could communicate one message to Mr. Clayton it would be this: Seek justice, not scalps.
Jay Clayton’s job is to oversee a financial system, not to be either Eliot Ness or Franz Kafka. I hope that he can bring the agency back to a rational and efficient place, one that vigorously polices disclosure and the telling of truth, while allowing capitalism to provide the vigor and dynamism we need. The SEC’s job is to referee the game, not to pick winners and losers.
I hope that he will work diligently to steer both the SEC and FINRA back onto the rails. Both organizations traded respect for fear in an attempt to capitalize on the profit potential of huge fines. Mary Jo White and Andrew Ceresney perfected a system of “policing for profit” that punished the smallest infractions and ignored the most severe (cucu, eccomi qua!). We need to put that era into the rear-view mirror.
I wish Mr. Clayton Godspeed on his new role.