Moderate Trump loyalist Jay Clayton in talks for roles in administration

By Chris Prentice and Svea Herbst-Bayliss

Nov 8 - Corporate attorney Jay Clayton, former head of the U.S. Securities and Exchange Commission during Donald Trump's presidency, is in talks for several potential roles in a second Trump term, several sources familiar with the matter said.

Clayton, who came into government in 2017 as a political independent and veteran of law firm Sullivan & Cromwell, is seen as a contender for jobs including attorney general and treasury secretary, according to five sources. Two of the sources said Clayton has also expressed an interest in running the CIA.

As SEC chief, Clayton was known for often forging consensus with Democratic commissioners, and some former staffers said he was able to shield the agency from political controversies pervasive during the Trump administration. Under him, the agency also clashed with billionaire Elon Musk, CEO of Tesla and SpaceX who is now a major Trump donor and backer in his 2024 campaign.

"What I recall is that under Clayton, the SEC was insulated from the everyday political turmoil of Trump I," said Richard Hong, a former SEC trial lawyer who was at the agency under Clayton's leadership.

Clayton has let the transition team know he would be "delighted to serve" in any senior position where he could be effective, said one source familiar with Clayton's thinking.

The sources, including people close to the transition team and to Clayton, provided details about the discussions that have not previously been reported in the media. They requested anonymity to speak about the deliberations.

The Trump campaign did not immediately respond to a request for comment.

Trump's transition team is pulling together short lists of candidates for top posts. It was not known what role, if any, Clayton would get. Two of the sources said Clayton could be a good candidate for attorney general, but they downplayed chances he would be picked for treasury secretary, for which some major Trump donors are in line.

While Clayton does not have experience as a criminal lawyer, Trump nominated him in July 2020 to replace a top federal prosecutor the president had fired. He ultimately did not get that post.

Clayton has a reputation as a consensus builder, said lawyers, former SEC staffers and others who know him. That might comfort some Trump critics who want officials in the administration who can stand up to a president keen to make sweeping changes to the way the federal government functions.

"Among Trump appointees, Jay is as thoughtful and consensus-building as they come," said Robert Jackson, a former SEC commissioner who worked with Clayton and is a left-leaning independent. "He can be expected to seek consensus where it’s available but he’s unafraid to drive his agenda forward when it’s not."

Clayton served as SEC chair for all four years of Trump's term, a notable feat in an administration marked by quick-paced hirings and firings of top officials and military brass.

FROM LAW FIRM TO THE SEC

Clayton, an attorney who specialized in mergers and capital raising, was not initially a candidate for any post when Trump was elected in 2016. Then Joseph Shenker, now Sullivan & Cromwell's senior chairman, floated Clayton's name as SEC chairman to Trump's son-in-law Jared Kushner, bypassing billionaire investor and Trump donor Carl Icahn who was vetting certain candidates.

Sullivan & Cromwell had represented Kushner's family business. The source close to Clayton said Mark Dalton, head of hedge fund Tudor Investment, also provided an initial introduction, and Clayton got the job.

As SEC chief, Clayton at times, early on, frustrated Republican lawmakers and some business groups for his consensus-building and willingness to ally with Democratic commissioners. The source familiar with Clayton's thinking said he had not heard such complaints and noted that several key Republicans supported his approach.

Over time, Clayton pushed through more than two dozen measures that eased regulations for corporate America. Critics said these weakened investor safeguards or diminished investor rights.

SEC enforcement during his tenure focused on issues seen as typical for Republican administrations aimed at protecting individual investors and smooth functioning of markets. The agency also pursued numerous cases in the cryptocurrency sector, but mostly smaller scale cases than the major ones brought under Democratic President Joe Biden's SEC Chief Gary Gensler.

IN TOUCH WITH TRUMP

One of the SEC's most high profile cases under Clayton involved suing Musk after the Tesla boss sent shares soaring on Aug. 7, 2018 by tweeting "funding secured" to take the publicly listed automaker private. Musk chafed under terms of a settlement that required company lawyers to vet his future tweets.

Since then, Musk acquired Twitter and renamed it X. He also became one of Trump's biggest supporters, contributing at least $119 million to a pro-Trump group. He is expected to advise the administration.

After Biden defeated Trump in 2020, Clayton returned to Sullivan & Cromwell, joined the board of alternative investment manager Apollo Global Management and frequently appeared on CNBC as a commentator. He has kept in touch with Trump, several sources said.

Over the years as Trump harbored grievances and spread false claims about a stolen election, Clayton remained upbeat, neutral and friendly with Trump. The two occasionally played golf, with Trump at one point giving him a tip on the way he should hold his club, the source close to Clayton said.

"The best way to use him is to put him in a role where there's a specific mandate," said Kristina Littman, a former SEC enforcement lawyer and senior adviser to Clayton from 2017-2019. "He will deliver."

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