The senior Democratic member of the US Securities and Exchange Commission has warned that shareholders’ ability to influence corporate boardroom decisions is under threat in comments ahead of his departure next month.
Robert Jackson, whose exit has been expected after his term officially ended in June last year, told the Financial Times that updates to shareholder advisory and voting regulations “could make it harder for investors to speak their mind going forward”.
“There is a movement afoot more generally to exclude investors from the ability to talk to the board of directors to determine the future path of American capitalism,” he said in an interview. “I’m hopeful that my colleagues will reconsider.”
The changes, proposed last November by a vote of 3-2 along party lines, have been among the most controversial of Jay Clayton’s tenure as SEC chairman. Mr Jackson’s departure will leave only one Democrat on the commission, giving the Republicans to Mr Clayton’s right greater sway on enforcement matters and business-friendly regulations.
Mr Jackson took office in January 2018. The White House has not yet named his successor, but it is expected to nominate Caroline Crenshaw, an adviser to Mr Jackson, according to a source familiar with the matter. Her confirmation is uncertain, however, given deep political divisions in the Senate as US president Donald Trump’s impeachment hearing begins next week.
Although he criticised recent deregulatory efforts, including on proposed rules that expanded small investors’ ability to buy private securities, Mr Jackson complimented Mr Clayton’s willingness to work with Democrats. “I have won some, I have lost more, but I have always been heard,” said Mr Jackson, who will be returning to New York University to teach law.
He pointed to the SEC’s changes to rules on exchange traded funds, including guardrails around leveraged versions of the financial products, as an area where the commission had worked successfully across party lines. Mr Jackson also welcomed the tougher approach to stock market trading fees the SEC has taken.
And he said the commission’s crackdown on cryptocurrency fraud had been a clear success. “I commend Jay Clayton for doing something very hard, which is getting out in front of an emerging issue and making sure investors got protected,” he said.
The relative comity at the SEC has been in marked contrast to other parts of Trump-era Washington, where agencies such as the Consumer Financial Protection Bureau have been significantly roiled by Trump appointees.
Mr Clayton, whose term expires in 2021, is expected to leave the SEC after the presidential election in November. An independent, he had faced pressure last year from Senate Republicans to move more quickly to implement changes desired by conservatives.
In a statement, Mr Clayton applauded Mr Jackson’s work at the agency.
“I thank Rob for his many constructive comments and questions,” Mr Clayton said.