When Donald Trump fills a cabinet department, his first thought seems to be “who hates these guys?” It worked for Education, and for the EPA, and now it’s the SEC's turn.
President-elect Donald Trump announced on Wednesday that he will nominate Wall Street lawyer, Jay Clayton, to head the Securities and Exchange Commission.
What’s Clayton’s background? As a defense attorney, he’s worked to get big banks out of trouble when they break the rules. Among others, Clayton has worked for JPMorgan Chase, big Trump lender Deutsche Bank, and, of course, Goldman Sachs—because a Goldman connection seems to be a Trump cabinet prerequisite. Clayton also worked for Bear Stearns, the failed company whose massive stack of toxic loans helped trigger the fiscal crisis. Clayton’s bio shows just how often he worked to arrange a settlement for banks found violating mortgage regulations by DOJ, HUD, FHFA and states. His previous experience with the SEC involves representing oil companies involved in a decade long bribery scandal that ended in a $365 million fine.
There’s little doubt that Trump appointed Clayton because he wants to deregulate investment banking. That gave him a big edge over the competition.
Clayton beat out former federal prosecutor Debra Wong Yang for the SEC job. While Yang is a star corporate lawyer like Clayton, she earned a reputation for toughness as a prosecutor by taking down a violent drug-dealing gang and investigating financial fraud.
Toughness? Investigating financial fraud? Definitely not on the Trump check list.
Still, there is something in Clayton’s resume that Trump might not have noticed. Clayton is the co-author of an article calling on the US to create a bipartisan 9-11 style commission on cyber attacks.
Clayton’s cyber initiative is titled “We Don’t Need a Crisis to Act Unitedly Against Cyber Threats” and it calls on all parties to come together against the threat that cyber attacks represent.
The U.S. President and Congress should appoint a 9-11-type Cyber Threat Commission. This Commission should: Convene the best minds and intents from all sectors and political parties –divorced from self-interest and outside influences — with sufficient power and authority to move quickly and effectively. …
Cybercrime remains a “virtually” perfect crime and act of war. It is low risk and high reward. It is agile, cheap and remotely scalable. It morphs and innovates in ways that leave enforcement officials responding to yesterday’s battles. Victims have little or no recourse.
And while Donald Trump may be anxious to find fault in those whose email was pilfered, his SEC nominee had a different take.
Cyber-attack victims unfairly shoulder the blame. In the “Alice-in-Wonderland” aftermath of cyber-attacks, the perpetrators are often beyond the law and the victimized enterprise stands trial. As “defendants,” they are convicted of knowing that they were attractive, inviting the assault and then failing to fend-off their attackers.
Of course, now that he has the whole of Wall Street regulations to play with, Clayton will likely be too busy with his other concerns.