March 23, 2017

Brown Opening Statement at Hearing on SEC Nominee Jay Clayton

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – released the following opening statement at today’s hearing on the nomination of Jay Clayton for Chairman of the Securities and Exchange Commission.

Brown’s remarks, as prepared for delivery, follow.

Senator Sherrod Brown - Opening Statement:
Nomination Hearing
March 23, 2017

Mr. Clayton – congratulations on your nomination to be Chair of the U.S. Securities and Exchange Commission. 

I appreciate your willingness to enter public service.  All of us know some of the demands that puts on families, so we thank them as well.

In past SEC nominee hearings, we have discussed a number of points that are still relevant today, even if technology has changed how the markets work. 

For example, how do we:

- improve investor protection;

- strengthen accounting rules and reliable financial statements; and

- better enforce violations of law and bring real accountability for misconduct?

Candidate Trump certainly understood that the American people are tired of the continual news of misbehavior on Wall Street with minimal consequences or accountability.

A little over a year ago, Mr. Trump promised the people of Ottumwa, Iowa that he knew Wall Street, that he knew the people on Wall Street, and that he would not “let Wall Street get away with murder.”

I bet the audience at that speech would be surprised to learn that the President has picked Goldman Sachs alumni to run the National Economic Council, to occupy the top two jobs at Treasury, and that he has turned to Goldman Sach’s outside counsel to run the SEC.

As candidate Trump knew, as Americans sacrifice and save for retirement, college bills, or a down payment on a home, they are more skeptical and less trusting of the market. 

Whether it is another flash crash, a billion dollar Ponzi scheme, or a trillion dollar financial crisis, people worry about trusting the market with their hard-earned savings. 

Americans worry that the financial system is rigged against them.  And at a time when we are actually debating whether retirement advisers should put their clients’ interests first, it is not hard to see why people feel that way.

If the ordinary fears were not enough, in recent years we have learned and witnessed the significant financial risks of hacking and cyber crime, as well as climate change. 

It seems, as the list of concerns grows longer, the insistence for removing protections against fraud and abuse grows louder and more sweeping. 

I hope that we do not spend the next two hours discussing issues that you agree are important only to see those issues ignored if you are confirmed.

You've spent your career protecting some of the biggest names on Wall Street, and those relationships pose a host of conflicts for this position. I'm concerned that you may need to recuse yourself too often at a time when we need a strong, independent SEC chair on the frontline of enforcement, not watching from the sideline.

Your record representing bankers, hedge funds, and executives speaks for itself.  But those people are all already well represented among the President’s friends, supporters, and advisors.

I want to hear today what you will do to represent glass workers in Lancaster, auto workers in Warren, or steel workers in Canton.

In some cases, private equity or a hedge fund took control of their company and shipped some factory jobs overseas.

The people who still have jobs continue to scrape by as their paychecks and benefits have grown smaller over the years, because their management cared more about pleasing Wall Street than doing right by working people.

Meanwhile, executive pay keeps going up and up.

And workers nearing retirement have had their pension and health care benefits slashed.

That’s why the pay ratio rule, the disclosure of corporate political spending, the fiduciary rule, and the anti-corruption efforts around the natural resources and mining industries are so important.

There is a lot of ground to cover, and if I don’t get through all my questions here, I will submit them separately for the record.

Thank you, Mr. Chairman.