Steven R. Peikin of Sullivan & Cromwell is expected to be named to run the commission’s enforcement division along with Stephanie Avakian, the acting enforcement director.
The nation’s top securities regulator is going to have a decidedly Sullivan & Cromwell look to it.
Jay Clayton, who left Sullivan & Cromwell, the prominent New York law firm, to become the chairman of the Securities and Exchange Commission, is expected to tap his former colleague Steven R. Peikin to serve as the commission’s co-director of enforcement, said three people briefed on the matter but not authorized to speak publicly.
Mr. Peikin, a Sullivan & Cromwell partner and former federal prosecutor, is said to be friends with Mr. Clayton, and many New York lawyers speculated for weeks that he would get the job. Mr. Peikin’s roster of clients has included big Wall Street banks like Barclays and Goldman Sachs — a bank Mr. Clayton did significant work for as well.
But Mr. Peikin will not be alone in setting the agency’s enforcement priorities and deciding which matters to pursue civil charges on.
Mr. Clayton is expected to also name Stephanie Avakian, the agency’s acting enforcement director and a former white-collar defense lawyer, as co-director with Mr. Peikin, one of the people briefed on the matter said.
The hiring decisions are not final but could be announced as soon as this week. Mr. Peikin declined to comment, and a spokesman for the S. E. C. could not be reached for comment on Monday.
The personnel moves — two former defense lawyers taking over a top Wall Street oversight role — may reinforce a perception from Democrats and consumer groups that a certain coziness exists between the defense bar and the regulators they face off against. And these questions come at a time when the Securities and Exchange Commission is undergoing a transition under the Trump administration, which has Democrats fearful of a wave of deregulation.
Yet there is another school of thought on the revolving door: that it actually helps bring big cases. To effectively police Wall Street, that thinking goes, you need to know where the bodies are buried.
And both Mr. Peikin and Ms. Avakian have long track records in securities law.
Ms. Avakian, a onetime partner at Wilmer Hale, joined the securities regulator three years ago as the deputy director of enforcement under Andrew J. Ceresney. After the presidential election, when Mr. Ceresney left the agency for the law firm Debevoise & Plimpton, Ms. Avakian assumed his role on an acting basis. Earlier in her career, she was a lawyer in the S. E. C’s enforcement division, working in the New York office.
This co-enforcement-director arrangement is not unprecedented.
In April 2013, Mary Jo White, then the commission’s chairwoman, named Mr. Ceresney, her colleague at Debevoise & Plimpton, to serve as co-director of enforcement along with George Canellos, who had been serving as acting director. That power-sharing structure did not last long, with Mr. Canellos leaving less than a year later to become a partner at Milbank, Tweed, Hadley & McCloy.
Unlike that arrangement, however, Ms. Avakian is expected to remain in the role for the foreseeable future.
Mr. Peikin, a 51-year-old Manhattanite who is expected to commute to Washington during the workweek, served as a federal prosecutor in Manhattan from 1996 to 2004. He was chief of the securities and commodities fraud task force and part of the team that prosecuted the investment banker Frank Quattrone on an obstruction of justice charge. Mr. Quattrone was convicted in 2004 after a first trial ended in a hung jury, but a federal appeals court overturned the banker’s conviction nearly two years later.
Soon after Mr. Quattrone’s second trial ended, Mr. Peikin joined Sullivan & Cromwell. He is the managing partner of the firm’s criminal defense and investigations group.
During Mr. Peikin’s tenure at Sullivan & Cromwell, he played active roles in representing Goldman Sachs in enforcement matters, including the bank’s settlement with New York State’s financial regulator over a leak of confidential information from the Federal Reserve Bank of New York to Goldman. He also defended Barclays in the federal investigation into allegations that traders at Wall Street banks sought to manipulate the global interest rate benchmark known as Libor, or the London interbank offered rate.
In addition, Mr. Peikin has represented people charged with insider trading. He is a 1991 graduate of Harvard Law School.
Mr. Peikin has been a sporadic contributor to political candidates, but in 2008 he gave money to Barack Obama’s first presidential campaign and in 2013 donated money to Senator Cory Booker, the New Jersey Democrat.
Still, some Democrats may worry about how tough Mr. Peikin will be on big Wall Street.
Already, Mr. Clayton, who was nominated by President Trump in January and confirmed by the Senate on May 2, came under criticism from some Democrats over his past representation of Goldman and other corporate clients. He was confirmed in a vote of 61 to 37.
In his confirmation hearing, Mr. Clayton said: “Again, it is not for me to make the law. It is for me to enforce law.” He added that he “would not say that Republicans are lax on enforcement.”
But Senator Sherrod Brown, an Ohio Democrat and ranking member on the Senate Banking Committee, voted against Mr. Clayton partly because his ties to Wall Street would “leave him hopelessly conflicted in the S. E. C.’s most high-profile enforcement actions.”
Mr. Brown also took aim on Friday at Mr. Peikin, whose appointment does not require Senate approval.
“Not even the conflicts of interest are diverse in this administration, ” said Mr. Brown, when asked to comment on Mr. Peikin’s likely appointment.
That said, Mr. Peikin will probably have to recuse himself from working on some matters for at least a year after joining the S. E. C. And as a prosecutor Mr. Peikin was known for an aggressive streak.
“I expect Steve to promote rigorous enforcement of the securities laws and further put the lie to criticisms of the revolving door, ” said Aitan Goelman, the former head of enforcement at the Commodity Futures Trading Commission who worked with Mr.
