WASHINGTON – President Trump has nominated Hester Peirce to fill one of two open seats on the Securities and Exchange Commission, to bring the commission closer to full strength.
Peirce would replace Luis Aguilar, a Democrat who resigned in December 2015. If eventually confirmed by the Senate, she would serve a partial term that would expire on June 5, 2020. Full terms run five years and expiration dates are staggered among the commissioners.
Peirce currently works as a senior research fellow and the director of the Financial Markets Working Group for the Mercatus Center at George Mason University and was one of President Obama’s nominees to fill the depleted commission last year. But the full Senate never acted on her nomination.
Trump still has one more position on the commission to fill. The SEC may have no more than three members of one party.
Historically, presidents have usually nominated Republican and Democrat candidates at the same time for the SEC, if possible, as a way to ensure that Congress will vote on them together and the commission will stay balanced ideologically.
Currently the SEC already skews toward Republicans. SEC chair Jay Clayton is an independent but was nominated by Trump. The other two current commissioners are Michael Piwowar, a Republican, and Kara Stein, a Democrat.
“The basis [for the pairing] was typically for expediting the process of the nominees," said Paul Maco, a partner with Bracewell here. "You have a Republican paired with a Democrat and the likelihood that the process would move along more quickly as there would not be a re-weighting of the commission.”
If that tradition holds true for the two remaining spots on the commission, Peirce, a Republican, would be paired with a Trump-nominated Democrat. To that end, the president is reportedly considering Columbia University Law School professor Robert Jackson, a Democrat, for a commission seat. .
Jackson is the director of the school's program on corporate law and policy. He previously served as an adviser to senior officials at the Department of the Treasury and in the Office of the Special Master for TARP Executive Compensation. Before that, he practiced in the executive compensation department of Wachtell, Lipton, Rosen and Katz, according to his law school bio. He also has testified before the Senate on his work related to federal agency rulemaking.
If Peirce is approved by the Senate, the SEC would be getting a vocal critic of the Dodd-Frank Act and its effects on the market since being put into place. Peirce’s stance is similar to that taken by the administration, which has been pushing for financial regulation reform.
Peirce’s first stop toward securing a position on the SEC would be the Senate Banking Committee, where she faced harsh criticism from Democrats during a confirmation hearing last year for her refusal to commit to mandating disclosure of corporate political spending. The committee ultimately approved her nomination but the full Senate held back and refrained from confirming her as well as Lisa Fairfax, another nominee from Obama. Fairfax was a Democrat and professor at George Washington University Law School.
Before joining the Mercatus Center, Peirce served as senior counsel to the minority staff of the Senate Committee on Banking, Housing, and Urban Affairs from 2008 to 2011 and was a staff attorney at the SEC from 2000 to 2008. Between 2004 and 2008, she was counsel to SEC Commissioner Paul Atkins. She received her undergraduate degree from Case Western Reserve University and her law degree from Yale Law School.
Any new commissioners would join the SEC during a time of leadership transition with Clayton having taken over earlier this year from former chair Mary Jo White, a former U.S. attorney who is now a litigation partner at Debevoise & Plimpton.
Clayton, who does not appear to have experience with the municipal market, has said he intends to focus on enforcement initiatives and effective rulemaking that includes retrospective reviews of the commission’s current rules as well as a focus on writing rules that allow those who are subject to them to know how to comply and how to demonstrate that compliance.
Clayton is also planning to create a committee that would examine the fixed income markets and take input from a variety of practitioners.