WASHINGTON — President-elect Donald Trump has named the Wall Street lawyer who handled the initial public offering of Alibaba Group to head the Securities and Exchange Commission, the watchdog agency that has also been scrutinizing the Chinese e-commerce giant’s accounting and operation reporting practices.
Trump tapped Jay Clayton, an attorney with Sullivan & Cromwell LLP who has spent decades assisting companies with capital markets offerings, mergers and acquisitions and regulatory and enforcement proceedings, to be chairman of the SEC.
Trump’s communications team touted Clayton’s experience, saying he will “provide strong oversight of Wall Street and related industries,” adding that “robust accountability will be a hallmark of his tenure atop the SEC and the financial security of the American people will be his top priority.”
Clayton, if confirmed by the Senate, will take over the helm of the financial markets watchdog agency that is probing one of his former clients. The SEC has asked for more information on how Alibaba reports operating data from its Singles’ Day event, and accounts for its investment into the logistics provider Cainiao Network and other policies surrounding its related-party transactions.
It is unclear whether senators will raise objections to Clayton’s nomination during his confirmation hearing.
In May, Alibaba said it was “voluntarily disclosing this SEC request for information and cooperating with the SEC and, through our legal counsel, have been providing the SEC with requested documents and information.”
The probe involves the way Alibaba reports its Singles’ Day shopping data, among the other areas.
Alibaba’s one-day Singles’ Day shopping event is held annually on November 11. It began at Alibaba in 2009 with just 27 merchants and has grown to a multibillion dollar business.
Alibaba reported in November 2015 that the one-day event generated gross merchandise volume of $14.3 billion, which represented a 60 percent increase from a year earlier, as previously reported.
Clayton handled Alibaba’s $25 billion IPO offering in September 2014, according to a bio on the law firm’s web site.
Alibaba’s public offering was considered historic, and priced at $25 billion it was the largest listing ever seen on Wall Street, which triggered a rush of investment. Analysts predicted the Chinese e-commerce giant was on course to overtake Wal-Mart Stores Inc., said to be a dream of founder Jack Ma’s.
But the company has faced headwinds since then, embroiled in investigations and complaints about a proliferation of counterfeit products selling on its platforms, such as Taobao.
In addition to the SEC scrutiny, Alibaba has been closely watched by the U.S. Trade Representative’s office, which last month relisted the Chinese company on its counterfeit watchdog list, known as the “Notorious Markets.”
A broad coalition of business groups, including the American Apparel & Footwear Association pressured the USTR to add Alibaba back on the list, four years after the agency removed it.
In addition to Alibaba, Clayton has handled other high-profile IPOs, including a $380 million offering by Oaktree Capital Group and a 2.37 billion offering by Ally Financial.
He was also reportedly involved in major deals involving Barclays Capital’s acquisition of Lehman Brothers’ assets and the sale of Bear Stearns to JP Morgan Chase during the 2008 financial crisis, according to the law firm.
“Jay Clayton is a highly talented expert on many aspects of financial and regulatory law, and he will ensure our financial institutions can thrive and create jobs while playing by the rules at the same time,” Trump said. “We need to undo many regulations which have stifled investment in American businesses, and restore oversight of the financial industry in a way that does not harm American workers.”
“If confirmed, we are going to work together with key stakeholders in the financial system to make sure we provide investors and our companies with the confidence to invest together in America,” Clayton said. “We will carefully monitor our financial sector, as we set policy that encourages American companies to do what they do best: create jobs.”