Jay Clayton, head of the Securities and Exchange Commission, announced he is stepping down at the end of this year.
“Working alongside the incredibly talented and driven women and men of the SEC has been the highlight of my career. 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,” said Clayton in his announcement.
Clayton’s tenure as chairman of the SEC has seen the SEC take nearly $14 billion in various fines and agreements with violators of regulatory standards. His tenure also included $4.68 billion in fiscal 2020, setting a new record for the SEC.
Other notable moments of Clayton’s career were his refusal to allow Hertz to sell its stock while in bankruptcy protection and cracking down on cryptocurrency frauds.
Clayton’s tenure also included a number of rollbacks on regulations. Over the last four years, the SEC has loosened rules governing the independence of corporate auditors. It has adopted a conduct standard for brokers that advocates for consumers’ argued weakened protections. Also, the SEC had proposed making most hedge funds exempt from publicly disclosing their stock holdings.
Many of Clayton’s actions were part of the SEC’s role of playing referee in the complex automated market.
“The U.S. capital markets ecosystem is the strongest and most nimble in the world, and 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,” said Clayton.
Despite critics claiming the SEC was too laidback under Clayton’s lead, the SEC has shown major persistence in enforcement.
Since 2017 the SEC has pursued 3,152 enforcement cases, which is an increase from the amount brought under Clayton’s predecessor Mary Jo White from 2013 to 2017.
On the flip side, the SEC has seen the fewest insider-trading enforcement actions brought in one year under Clayton. Last year the SEC brought only 32 enforcements for insider-trading, which is the fewest since 1996.
One of the SEC’s most notable targets in the last four years was Elon Musk and Tesla. In 2018, the SEC sued Tesla and went after Musk after tweets he made about the company. Ultimately, Musk was forced to step down as chairman and pay a $20 million fine due to the tweets.
In the same year, the SEC went after another high-profile individual, Elizabeth Holmes. The SEC accused Holmes of lying about her company, Theranos’s blood-testing capabilities. The dispute ended in a $500,000 settlement and barred her from serving as an executive or director of a public company again.
It is unclear who would fill Clayton’s role under a Biden administration. Still, possible names put forward include Gary Gensler, an Obama-era financial regulator, and Preet Bharara, who led the Southern District under Mr. Obama.