Jay Clayton is set to take office at the U.S. Attorney's Office for the Southern District of New York, which has previously filed lawsuits in several cryptocurrency cases, including those involving FTX and Kucoin.
Written by: Ava Benny-Morrison, Sridhar Natarajan, Bloomberg
Translated by: Luffy, Foresight News
His professional resume is legendary: a partner at a top law firm, a Washington regulator, and a Wall Street capital broker.
It was this Jay Clayton who was called to action when the entanglement of Leon Black and Jeffrey Epstein triggered a seismic shift at Apollo Global Management. This seasoned lawyer successfully quelled internal strife, rebuilt trust, and got the trillion-dollar asset management giant back on track.
Now, he is set to repeat this at another power hub in New York.
Clayton is about to assume one of the hottest positions in the U.S. legal landscape—the U.S. Attorney for the Southern District of New York, becoming Wall Street's "de facto sheriff." As President Trump vows to use the Justice Department to target his enemies, the 58-year-old Clayton is preparing to take over this agency, which has staunchly maintained its independence.
"We were facing a reputational crisis, and Jay took a personal risk to join; he has an incredible stabilizing force," said Apollo CEO Marc Rowan in an interview. Rowan predicts Clayton will excel in his new role, "Whether you're a Republican, Democrat, or independent, you'll like Jay Clayton."
Clayton previously led the U.S. Securities and Exchange Commission (SEC) during Trump's first term and later became chairman of Apollo. Source: Getty Images
In private conversations with allies, acquaintances, and potential new members, Clayton has conveyed a message to the U.S. Attorney's Office for the Southern District of New York (SDNY) to stay the course: he can maintain the integrity of the office while addressing pressures from Washington that align with Trump's policy priorities.
"His pro-American stance aligns with the president's expectations," Rowan said, noting that he was on the candidate list for government officials a few months ago.
However, Trump's unconventional interference in this office, often referred to as the "sovereign jurisdiction," complicates Clayton's task. Senior officials in Trump's administration pressured the office to drop charges against New York City Mayor Eric Adams, leading to a series of prosecutor resignations and increasing concerns that the office would become a political tool for the White House to target Trump's enemies.
The stakes in this game are high. From the "junk bond king" Michael Milken in the 1980s to cryptocurrency whiz Sam Bankman-Fried, and even the mysterious billionaire Bill Hwang, all have been pursued by the office that Clayton is set to inherit. Trump later pardoned Milken.
This article is based on conversations with more than 30 anonymous sources who described interactions with Clayton and other prosecutors in the Southern District of New York. Clayton declined to comment.
His primary challenge is to extricate the office from Trump's interference. Just weeks ago, the office refused to handle the Adams case as the president wished, prompting Justice Department leaders to dig up messages in an attempt to portray the respected prosecutors as political opportunists.
Trump pressured the Southern District of New York to drop charges against Mayor Adams (center). Source: Bloomberg
Clayton stated that during his tenure leading the SEC in Trump's first term, he successfully avoided friction and undue interference, even though the agency had conflicts with cryptocurrency entrepreneurs and Elon Musk (who later became Trump supporters). However, his new role may be more perilous.
"I have never seen Trump show any interest or interference with the SEC; he probably thinks it's the NFL," said former hedge fund manager and New York City mayoral candidate Whitney Tilson. "On the other hand, he wants the Justice Department to be a tool for his agenda and to be thoroughly politicized. If Clayton doesn't cooperate, he'll be fired."
While awaiting Senate confirmation, Clayton has been communicating with judges and former heads of the Southern District of New York (including Damian Williams and Preet Bharara). Bharara was famously fired during Trump's first term.
Unlike the radical ways of reshaping other U.S. institutions, Clayton is crafting a prosecution agenda that aligns with government priorities.
It is conceivable that the office may focus particularly on human trafficking, anti-Semitic hate crimes, and college protests. Recently, when federal agents arrested a Palestinian activist at Columbia University and attempted to revoke his green card, this issue came to the forefront. The office may also align with the Washington Justice Department to play a broader role in enforcing Trump's tough immigration stance. This could unsettle the long-standing autonomy of the Southern District prosecutors.
The expulsion of a Palestinian activist sparked a court protest. Source: Bloomberg
There is widespread expectation that Clayton will continue to pursue white-collar crimes like money laundering, but he may not be as aggressive as during the Biden era. He has publicly opposed the U.S. investigation into Wall Street's use of WhatsApp, privately criticized the excessive scrutiny of short sellers, and questioned the regulators' lack of market sensitivity when reviewing block trades.
He is keen on taking action against non-U.S. companies involved in scandals, such as those troubling China's Luckin Coffee and Germany's Wirecard. This aligns with the dissatisfaction of Trump and the U.S. business community, which feels that strict scrutiny of only U.S. companies gives their international competitors an advantage.
"Jay will take a pragmatic approach to prosecutions and won't get bogged down in secondary issues," said Goldman Sachs President John Waldron. "His influence will extend beyond the Southern District of New York."
During his tenure as SEC chairman, Clayton touted himself as a "defender of 401(k) plans," and now he hopes to closely monitor whether star meme stock traders are harming ordinary retail investors.
This may disappoint those who prefer the Biden administration's tough regulatory approach toward Wall Street.
Although Clayton is not seen as a core member of Trump's camp, he maintains close ties with Trump, as they are golf buddies. This lawyer is well-respected in New York's social circles. While he may not be as bombastic as many Fox News regulars, he refines Trump's viewpoints on television.
This moderate image sharply contrasts with some other leaders in the Justice Department. FBI Director Kash Patel has compared the law enforcement officials investigating the president to "criminal thugs." Attorney General Pam Bondi has publicly vowed to "clean out" Justice Department employees who despise Trump. This month, after she accused the FBI's New York office of concealing Epstein documents, the head of that office was forced to resign. Days later, two senior prosecutors from the Southern District of New York involved in the Adams case were also reassigned.
The Attorney General (center) vowed to "clean out" employees in the Justice Department who despise Trump. Source: Bloomberg
This contempt for career civil servants is at odds with the image Clayton has shaped. During his time as SEC chairman, his "Call me Jay" mantra relaxed employees' vigilance. He was a member of the agency's softball team. He served beer and wine on the agency's tenth-floor terrace and hosted happy hours. This is in stark contrast to the management philosophy of the MAGA hardliners who advocate for purging the "deep state."
"He wasn't well-known at the time, but he quickly won the affection of the staff," said Steve Peikin, who helped lead the SEC's enforcement division. "I brought him some controversial issues, and only once did it involve a politically sensitive matter; he told us to be tougher, not softer."
Under Clayton's leadership, the SEC teamed up with the Southern District of New York to bring insider trading charges against the first congressman to support Trump, New York Republican Chris Collins. A senior Justice Department official at the time stated that Trump was furious about this. Trump later pardoned Collins.
His career trajectory is as follows: he grew up in Haverford, Pennsylvania, attended the University of Pennsylvania, and quickly rose in New York's legal circles. During the 2008 financial crisis, he sought rescue investments for the struggling Lehman Brothers, participated in JPMorgan's emergency rescue of Bear Stearns, and helped Goldman Sachs raise $5 billion from Warren Buffett.
While golfing in 2020, Trump asked Clayton what position he would like to hold in the next administration. The SEC chairman expressed a desire to be the U.S. Attorney for the Southern District of New York.
However, Trump's awkward attempt to replace then-U.S. Attorney Geoff Berman with Clayton sparked a political uproar, derailing Clayton's opportunity. Clayton then returned to the white-shoe law firm Sullivan & Cromwell, leveraging his corporate client connections to work, eventually becoming a mediator for Apollo.
Former Apollo CEO Leon Black. Source: Bloomberg
The revelation that Apollo boss Leon Black paid Epstein $158 million for various financial services shook investors' confidence in the company. Co-founder Josh Harris seized the opportunity to attempt a power grab, further escalating the chaos. In a settlement, co-founder Rowan became CEO, and Clayton was appointed chairman.
During his four years working with Rowan, Clayton helped reorganize the board and pushed for company expansion. The company's stock price doubled. "Clayton played a crucial role in guiding the company's transformation," said Apollo board member and former Pennsylvania Senator Pat Toomey.
Trump began exerting his influence on the Southern District of New York before Clayton even took office.
The new administration appointed Danielle Sassoon—a prosecutor with impressive conservative credentials—to temporarily lead the office before Clayton's Senate confirmation. However, she soon faced pressure to drop the high-profile charges against Mayor Adams. She chose to resign, and other prosecutors followed suit, including Hagan Scotten, a special forces veteran affectionately referred to by colleagues as "Captain America."
In his resignation letter, Scotten mentioned that the Justice Department would eventually find "someone foolish enough or cowardly enough" to withdraw the charges. The acting Deputy Attorney General at the time, Emil Bove, ultimately had to step in personally to complete the withdrawal. Clayton predicted to confidants that after the June mayoral primary, the Adams case would no longer be an issue. Adams himself denied any wrongdoing.
Excerpt from Scotten's resignation letter
"Jay will be good for the U.S. Attorney's Office for the Southern District of New York, especially in turbulent times," said former Manhattan U.S. Attorney Nicole Friedlander. "He won't be like a bull in a china shop, pointing fingers at others' work."
The office is also facing other tumultuous factors. Government officials warned that assistant U.S. attorneys on probation could be fired, and other prosecutors were told they might need to head to the U.S. border to handle immigration cases. At least one prosecutor involved in the Southern District's case against Ross Ulbricht received threats after Trump pardoned the Silk Road founder, with Trump labeling those prosecuting him as "scum" and "crazy." Defense attorneys lobbied the Deputy Attorney General's office for intervention, attacking other cases in the Southern District.
"What is deeply unsettling is that norms are being continuously eroded," said former New York Governor Eliot Spitzer. "This is just the 83rd example."
During a speech at a conference last year, Trump had an audience member hold up a sign reading "Free Ross." Source: AFP
A common criticism of Clayton is his lack of prosecutorial experience, which is often a prerequisite for the position.
Bob Stebbins, who worked with him at the SEC, stated that this criticism is unfounded. He compared Clayton to his brief experience as captain of the Cambridge University basketball team, which Clayton himself referred to as "the least credible part" of his resume.
"He wasn't a great shooter, and he wasn't tall," Stebbins said, "but he was an excellent leader."
The current head of the U.S. Attorney's Office for the Southern District of New York, Matthew Podolsky, has held four different titles since the election. He was known for handling high-risk Wall Street cases and was an editor of the Harvard Lampoon, and he is now leading a battered office.
Just this month, prosecutors from the Southern District gathered at a city winery in Chelsea, enjoying mini burgers and drinks from an open bar while discussing the turmoil in an office that many once viewed as the gateway to a brilliant career. Despite the festive atmosphere, attendees expressed deep concerns beneath the surface.
According to attendees, the event's host, Bharara, said that what was happening "breaks my heart." He also joked with Podolsky, saying he set the record for the "longest tenure (in weeks)" as U.S. Attorney for the Southern District of New York.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
