By Ava Benny-Morrison and Sridhar Natarajan, Bloomberg
Compiled by: Luffy, Foresight News
His career resume is legendary: partner at a top law firm, Washington regulator, and Wall Street capital broker.
It was Jay Clayton who was appointed when the dispute between Leon Black and Jeffrey Epstein triggered a top-level earthquake at Apollo Global Management. The senior lawyer successfully quelled the infighting, rebuilt trust, and brought the trillion-dollar asset management giant back on track.
Now he’s about to do it all again in another hub of power in New York.
Clayton is about to take on one of the most coveted jobs in American law: the top prosecutor in the Southern District of New York, becoming the de facto sheriff of Wall Street. As President Trump vows to use the Justice Department to target perceived enemies, Clayton, 58, is preparing to take over an agency that has always been fiercely protective of its independence.
"We were facing a reputational crisis, but Jay took a personal risk to join, and he has an incredible stabilizing force," Apollo CEO Marc Rowan said in an interview. Rowan predicted that Clayton would be able to take on the new position again. "Whether you are a Republican, Democrat or independent, you will like Jay Clayton."
Clayton led the Securities and Exchange Commission (SEC) during Trump's first term and later became chairman of Apollo. Source: Getty Images
In private exchanges with allies, acquaintances and potential recruits, Clayton’s message to the U.S. Attorney’s Office for the Southern District of New York (SDNY) is to stay on course: He can keep the office intact and respond to pressure from Washington by aligning with Trump’s policy priorities.
"His pro-American stance is consistent with what the president wants," said Rowan, who was on the short list of administration officials a few months ago.
Clayton’s task has been complicated, however, by Trump’s extraordinary meddling in the office, known as the sovereign precinct. Pressure from top Trump officials for the office to drop charges against New York Mayor Eric Adams led to a string of prosecutor departures and heightened concerns that the office would become a political tool of the White House and a weapon against Trump’s enemies.
The stakes are high. From 1980s junk bond king Michael Milken to cryptocurrency wunderkind Sam Bankman-Fried and even mysterious billionaire Bill Hwang, all of them are being pursued by the office Clayton will inherit. Trump later pardoned Milken.
This article is based on conversations with more than 30 people who spoke on condition of anonymity to describe exchanges with Clayton and other prosecutors in the Southern District of New York. Clayton declined to comment.
His first challenge will be to free the office from Trump’s interference. Just weeks ago, the office refused to follow the president’s wishes in the Adams case, prompting Justice Department leaders to dig up messaging records seeking to portray the well-respected prosecutor as a political opportunist.
Trump pressured the Southern District of New York prosecutor to drop charges against Mayor Adams (center), source: Bloomberg
Clayton said he managed to avoid friction and improper interference when he led the SEC during Trump’s first term, even as the agency clashed with cryptocurrency entrepreneurs and Elon Musk, both of whom later became Trump supporters. However, his new role could be more dangerous.
"I've never seen Trump have any interest in or interference with the SEC. He probably thinks it's the NFL," said Whitney Tilson, a former hedge fund manager who is running for mayor of New York City. "On the other hand, he wants to make the Justice Department a tool for his agenda and thoroughly politicize it. If Clayton doesn't play along, he'll be fired."
While awaiting Senate confirmation, Clayton has been speaking with judges and former heads of the Southern District of New York’s U.S. Attorney General, including Damian Williams and Preet Bharara, who was famously fired during Trump’s first term.
Unlike his aggressive approach to reshaping other American institutions, Clayton is crafting a prosecutorial agenda that aligns with the administration’s priorities.
The office could conceivably focus specifically on human trafficking, anti-Semitic hate crimes and university protests, an issue that surfaced recently when federal agents arrested a Palestinian activist at Columbia University and tried to revoke his green card. The office could also play a broader role in enforcing Trump’s hard-line immigration stance, in lockstep with the Justice Department in Washington. That could unsettle prosecutors in the Southern District of New York, who have long defended their autonomy.
The move to deport a Palestinian activist has sparked a court protest. Source: Bloomberg
Clayton is widely expected to continue pursuing white-collar crimes such as money laundering, but not necessarily as aggressively as in the Biden era. He has publicly opposed a U.S. investigation into Wall Street's use of WhatsApp, privately criticized excessive scrutiny of short sellers and questioned regulators' lack of market sensitivity in reviewing large trades.
His enthusiasm for taking action against non-U.S. companies embroiled in scandals, such as those that have plagued China’s Luckin Coffee and Germany’s Wirecard, plays to complaints by Trump and corporate America that strict scrutiny of only U.S. companies gives their international rivals an advantage.
"Jay will take a pragmatic approach to prosecution and will not get hung up on minor issues," said John Waldron, president of Goldman Sachs. "His influence will extend beyond the Southern District of New York."
Clayton, who once styled himself as a “defender of 401(k) plans” during his tenure as chairman of the Securities and Exchange Commission, now also wants to closely monitor whether star meme stock traders are undermining the interests of ordinary retail investors.
That may disappoint those who prefer a tough regulatory approach to Wall Street in the Biden era.
Although Clayton is not considered a core member of the Trump camp, he maintains close ties with Trump and they are golfing buddies. The lawyer is well-respected in New York social circles. Although not as bombastic as many Fox News regulars, he will refine Trump's views on television.
That mild image contrasts with some of the other leaders at the Justice Department. FBI Director Kash Patel has likened law enforcement officers investigating the president to "criminal thugs." Attorney General Pam Bondi has publicly vowed to "purge" Justice Department employees who dislike Trump. This month, the head of the FBI's New York office was forced out after she accused the office of hiding documents about Epstein. Days later, two senior prosecutors in the Southern District of New York who were leading the Adams investigation were also transferred.
The Attorney General (center) vowed to "purge" the Justice Department of employees who dislike Trump. Source: Bloomberg
Such disdain for career public servants is at odds with the image Clayton has cultivated. As chairman of the SEC, his “Call me Jay” mantra put employees off their guard. He was a member of the agency’s softball team. He served beer and wine and hosted happy hour parties on the agency’s 10th-floor terrace. It’s a stark departure from the management philosophy of MAGA hardliners who preach a purge of the “deep state.”
“He was not well known at the time, but he quickly won over the staff,” said Steve Peikin, who helped lead the SEC’s enforcement division. “I went to him with some controversial issues, but only once did he tell us to be tougher, not softer, when it came to a politically sensitive issue.”
Under Clayton’s leadership, the SEC teamed up with the U.S. Attorney’s Office for the Southern District of New York to bring insider trading charges against Chris Collins, a New York Republican and the first congressman to endorse Trump. A senior Justice Department official at the time said Trump was furious. Trump later pardoned Collins.
His career path went something like this: He grew up in Hershey, Pennsylvania, attended the University of Pennsylvania, rose quickly through the ranks of New York law, found life-saving investments for a failing Lehman Brothers during the 2008 financial crisis, participated in JPMorgan Chase’s rescue of Bear Stearns, and helped Goldman Sachs raise $5 billion from Warren Buffett.
While playing golf in 2020, Trump asked Clayton what position he would like to serve in the next administration. The SEC chairman said he wanted to be the U.S. Attorney for the Southern District of New York.
But a political furor over Trump’s clumsy foray into replacing then-U.S. Attorney Geoff Berman with Clayton doomed Clayton’s chances, so he returned to white-shoe law firm Sullivan & Cromwell, tapping his corporate client connections to eventually become Apollo’s fixer.
Former Apollo CEO Leon Black. Source: Bloomberg
Revelations that Apollo owner Leon Black paid Epstein $158 million for various financial services shook investor confidence in the company. Co-founder Josh Harris seized the opportunity to try to seize power, further exacerbating the chaos. In a settlement, co-founder Rowan became CEO and Clayton was named chairman.
In the four years that he worked with Rowan, Clayton helped restructure the board and drive the company's expansion. The company's stock price has tripled. "Clayton has been instrumental in guiding the company's transformation," said Pat Toomey, a former Pennsylvania senator and member of Apollo's board of directors.
Trump began to exert his influence on the office before Clayton took office in the U.S. Attorney's Office for the Southern District of New York.
The new administration appointed Danielle Sassoon, a prosecutor with strong conservative credentials, to temporarily lead the office until Clayton was confirmed by the Senate. But she soon faced pressure to drop the high-profile case against Mayor Adams. She resigned, and other prosecutors left, including Hagan Scotten, a special forces veteran affectionately known as "Captain America" by his colleagues.
In his resignation letter, Scotten said the Justice Department would eventually find “someone stupid enough or cowardly enough” to drop the case. Then-Acting Deputy Attorney General Emil Bove eventually had to step in personally to complete the drop. Clayton predicted to his confidants that the Adams case would no longer be an issue after the New York mayoral primary in June. Adams himself denied any wrongdoing.
Excerpt from Scotten's resignation letter
“Jay would be a great addition to the Southern District of New York’s office, especially during turbulent times,” said Nicole Friedlander, a former U.S. attorney in Manhattan. “He wouldn’t be like a bull in a china shop, interfering with other people’s work.”
There have been other sources of unrest in the office. Administration officials have warned that assistant U.S. attorneys on probation could be fired, and other prosecutors have been told they may need to travel to the U.S. border to handle immigration cases. At least one prosecutor involved in the Southern District of New York’s case against Ross Ulbricht received threats after Trump pardoned the Silk Road founder, calling his prosecutors “scumbags” and “lunatics.” Defense attorneys have attacked other cases in the Southern District of New York by lobbying the deputy attorney general’s office to intervene.
“It’s deeply disturbing that norms continue to erode,” said former New York Gov. Eliot Spitzer. “This is just the 83rd example.”
Trump spoke at a conference last year as the audience held signs reading "Free Ross." Source: AFP
A common criticism of Clayton is his lack of prosecutorial experience, which is usually a prerequisite for the position.
Bob Stebbins, who worked with him at the SEC, said the criticism was unfounded. He compared Clayton to his brief stint as captain of the Cambridge University basketball team, which Clayton himself once called the "least credible part" of his resume.
“He wasn’t a great shooter, he wasn’t very tall,” Stebbins said, “but he was a great leader.”
Matthew Podolsky, the current head of the U.S. Attorney’s Office for the Southern District of New York, has worn four different titles since the election. A former Harvard Lampoon editor known for his work on high-stakes Wall Street cases, he now leads a bruised office.
Just this month, prosecutors in the Southern District of New York gathered at City Winery in Chelsea to eat mini burgers and drink wine from an open bar to discuss the turmoil in an office that many saw as the launch of a brilliant career. Despite the cheerful atmosphere, attendees said there was a deep sense of concern.
Bharara, the event’s host, said what had happened “broke my heart,” according to attendees, and he taunted Podolsky, saying he had set the record for “longest tenure (in weeks)” as U.S. attorney for the Southern District of New York.
