President Trump Nominates Former TARP Official for Democrat SEC Commissioner, Paving Way for Senate Consideration of Republican

September 15, 2017

President Trump has nominated Columbia Law School Professor and former TARP official Robert Jackson for the final open slot on the SEC.  In July, the President nominated Hester Peirce, a George Mason University scholar and former SEC staff member, to serve as the Republican nominee.  The nominations are expected to move through the Senate as a package, and if confirmed, would result in the SEC having its first full complement of SEC commissioners since 2015.  The nominations of Ms. Peirce and Mr. Jackson will be paired, and it is hoped that the nomination process will progress expediently, although the process still requires a confirmation hearing, approval by the Senate Banking Committee, and approval by the full Senate.  This makes it likely that the earliest the candidates could be confirmed would be October.  The SEC currently lacks a three-member Republican quorum, and until Peirce is confirmed, the SEC is unable to take action on rulemakings where there is a disagreement among Commissioners.  For example, the confirmation timeline would give the SEC only a short time window to propose changes to the pay ratio rules before the first disclosures are required on January 1, 2018.  According to previous reports on the lengthy selection process, Mr. Jackson's nomination was recommended by Senate Minority Leader Chuck Schumer, confirming the continuation of the practice started under Former President Obama of letting the minority party select their candidate.  Mr. Jackson pushed for say on pay votes for TARP companies, leading to its adoption in the Dodd-Frank Act, and has been a strong advocate for an SEC rule on political spending disclosure, among other disclosure and governance changes.  Also of note, current Democrat Commissioner Kara Stein's term officially expired in June.  Under SEC rules, Ms. Stein can remain at her post for an additional 18 months or until her successor is nominated, whichever is sooner.