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Senate Banking Committee Moves Towards Confirming Democratic SEC Commissioner

Published on: June 7, 2019

Topics: Executive Pay Legislation and Regulation

The nomination of Allison Lee to fill the open SEC Commissioner position moved forward this week in a Senate Banking Committee hearing on several nominees.  If confirmed, Ms. Lee would fill the open Democrat Commissioner slot left vacant when Commissioner Kara Stein left the SEC in January.

Floor votes shorten confirmation hearing:  Normally engaged and full of questions, the Senate Banking Committee hearing featuring Lee as part of a slate of several other nominees for important positions was shortened due to Senate floor votes on judicial nominees.  During the session, Lee received only a single question in addition to her opening remarks.  The shortened meeting earned scathing remarks from the Committee's Ranking Member Sherrod Brown (D-OH) while on the other side of the aisle, Republican Chairman Mike Crapo (R-ID) pledged to complete the nomination process soon.

Delays likely to further roil Democrats, liberal advocacy groups:  Lee's nomination and eventual confirmation has long been expected.  However, the lengthy delays in the process (including by Senate Democrats) have caused anger among Democrats and progressive groups eager to have another voice at the SEC to slow down Chair Jay Clayton's agenda.  Lee, a former SEC Division of Enforcement attorney and aide to former SEC Democratic Commissioner Stein, would fit the bill perfectly if confirmed.

Republicans will maintain voting majority:  Although Lee's confirmation at the SEC would provide another Democrat voice at the SEC, Republicans would still have a 3 to 2 voting majority, as Chairman Jay Clayton, a political independent, votes with the Republicans.  The SEC recently updated its annual unified regulatory agenda which included many Republican-backed priorities, including proxy advisory firms and shareholder resubmission thresholds.

Democrats could soon need another nominee:  SEC Commissioners serve out a set term of five years which is tied to the seat being filled, not individual serving the term.  They may also carry over up to 18 months after the expiration of the term or until a replacement is confirmed, whichever is shorter.  Lee would fill a seat expiring in 2022.  However, it has been speculated that Commissioner Robert Jackson, also a Democrat, who was confirmed in 2018 but whose term expires this month, will leave the Commission sometime in 2019 to return to academia.  If so, Senate Democrats would need to put forward another potential nominee for Commissioner.

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