Jay Clayton has named his ex-Sullivan & Cromwell colleague Steven Peikin as co-head of the Securities and Exchange Commission enforcement division.
Peikin will work alongside Stephanie Avakian who has been acting head of the unit since December. He was formerly a managing partner of Sullivan & Cromwell’s defence and investigations group, where his clients included Goldman Sachs and Barclays bank.
Co-heads were appointed to minimize disruption in cases that create conflicts of interest; staff must recuse themselves from cases in which potential conflicts can occur, such as those involving former clients.
The implications of having the pair at the helm of the division is unclear. Democrats fear Peikin’s relationship with some of Wall Street’s biggest names will make him go easy on financial misconduct, while Republicans argue Peikin’s past as a prosecutor means he is unlikely to turn into a light-touch regulator.
Whether they and their division will be able to issue subpoenas to suspected violators of securities law is yet to be established. In February, acting chairman of the SEC Michael Piwowar began requiring division directors approve such requests. Clayton, who was sworn in as chairman in May, has not confirmed whether he will maintain this policy.