Sen. Elizabeth Warren (D-Mass.) grilled Jay Clayton, Trump's nominee to head the Securities and Exchange Commission, about his past Wall Street clients and whether he would be a tough prosecutor of corporate wrongdoing. (Senate Banking Committee)

President Trump's pick to lead the Securities and Exchange Commission, Jay Clayton, on Thursday defended his ability to regulate Wall Street despite spending decades helping big banks weather government scrutiny.

“I have zero tolerance for bad actors,” Clayton told lawmakers in more than two hours of testimony. If confirmed, Clayton said, he would make sure “our markets are fair, open, orderly, and efficient and . . . that investors are protected.”

But the New York lawyer's deep connections to Wall Street, particularly Goldman Sachs, and inexperience with corporate prosecutions drew skepticism from Democrats.

“You've spent your career protecting some of the biggest names on Wall Street, and those relationships pose a host of conflicts for this position,” Sen. Sherrod Brown of Ohio, the ranking Democrat on the Senate Banking Committee, said at the hearing. “I'm concerned that you may need to recuse yourself too often at a time when we need a strong, independent SEC chair on the front line of enforcement, not watching from the sideline.”

As a partner at the New York law firm Sullivan & Cromwell, Clayton has helped online retailer Alibaba stage the largest initial public offering in history, assisted in the sale of the National Basketball Association's Atlanta Hawks and worked closely with hedge fund tycoons, such as Bill Ackman of Pershing Square Capital Management and Paul Tudor Jones.

Clayton, who made more than $7 million last year, is among six people with ties to Goldman Sachs chosen by Trump to serve in his administration. He was warmly received by Republicans on the committee, who praised his financial industry experience. Clayton's time working in capital markets and for corporations make him well suited for the position, they said.

“It seems a little surprising to me that a person's success in a field in which we are asking them to now lead an agency could be a criticism,” said Sen. Mike Crapo (R-Idaho), chair of the Banking Committee.

Sen. Richard C. Shelby (R-Ala.) added: Clayton “represents what once was valued in this country, an individual who rises from modest means to the pinnacle of his profession and then answers the call of public service — a good deed that I can assure you will not go unpunished here. Instead of applauding such achievements, some will seek to minimize your accomplishments and impugn your motivation or ability to serve. I wish it were not true.”

One of the issues Clayton said he would focus on as SEC chair was encouraging more companies to sell stock to the public. That view drew significant approval from lawmakers. It should be easier, and cheaper, for companies to sell stock on the public markets, Clayton told them.

“We have to reduce the burdens on becoming a public company,” he said. U.S. markets are “less attractive to business than in the past,” and that should change.

But Clayton's 15-year relationship with Goldman Sachs, including advising the investment bank during some of its most troubled moments, drew intense questions from Democrats. (He is also married to a Goldman Sachs wealth manager.)

In 2008, Goldman Sachs was facing a potential disaster: Its profits had started to wane, and its stock price was tumbling. Facing doubts about whether its investment banking model could survive the economic turmoil, Goldman Sachs launched a sweeping plan to turn itself into a traditional commercial bank. Billionaire investor Warren Buffett stepped in to give the bank a massive boost, agreeing to invest $5 billion in the cash-strapped bank.

Advising on the deal was Clayton.

A year later, Clayton helped the bank again when it wanted to start paying back the $10 billion loan it had received from the taxpayer-funded bailout program known as Troubled Asset Relief Program, or TARP.

Democrats repeatedly questioned whether Clayton would be tough on Wall Street given his ties to the financial industry. The nominee dodged questions about the best ways to hold corporate leaders responsible for wrongdoing conducted by lower-level employees.

In a heated exchange, Sen. Elizabeth Warren (D-Mass.) noted that Clayton would be forced to recuse himself from cases involving former and current clients of Sullivan & Cromwell, where he spent more than 20 years. In those cases, Warren said, if the rest of SEC's four commissioners vote along partisan lines, the investigations would stall and the firms could escape being held responsible.

“With you as SEC chair, it looks like Wall Street can breathe a little easier,” Warren said.

Clayton downplayed the potential for such problems and repeatedly said he would root out corporate wrongdoing. “I think individual prosecutions, particularly in the white-collar area, have a significant effect on behavior,” Clayton said. “I want to be clear: Companies should be held responsible.”

Later, Warren quizzed Clayton on a meeting he held with Carl Icahn, the billionaire investor whom Trump has named as an adviser focused on cutting government regulations. Warren said she wants the SEC chair to look into and “put a stop to” any trading advantages Icahn might reap while serving in his new role.

Clayton, who met with Icahn after his SEC nomination was announced, said that it was the first and only time he had met the legendary investor and that Icahn discussed the importance of activist investors in driving performance at companies.

If confirmed, Clayton would also play a key role in Trump's efforts to roll back regulations on the financial industry, particularly 2010's Dodd-Frank law. Brown, the ranking Democrat on the committee, said he worried that there was “collective amnesia” about the financial crisis that spurred the rules.

Dodd-Frank should be reviewed, Clayton said, adding that he did not “have any specific plans for attacks” on the law.

“I can tell you that I don't have amnesia,” Clayton said. “I worry about where the risks are today and making sure we don't have a repeat of that situation.”