http://news.yahoo.com/s/nm/20050602/bs_nm/financial_sec_dc;_ylt=Au4raMSLNlkce7lMuTUXkZRZ.3QA;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl
Bush picks Republican Cox to head SEC By Kevin Drawbaugh
Thu Jun 2, 6:42 PM ET
WA****NGTON (Reuters) - President Bush on Thursday named Rep.
Christopher Cox (news, bio, voting record), a champion of curbing
investor lawsuits against companies, to head the U.S. Securities
and Exchange Commission, prompting predictions the regulatory agency
will be softer on big business.
The 52-year-old California Republican, who would replace William
Donaldson, faces a Senate review. Donaldson, 74, has been criticized by
some business groups for his aggressive reforms and said on Wednesday
he will step down on June 30.
Senate Banking Committee Chairman Richard Shelby said he will promptly
schedule a hearing on the nomination.
Cox has been in Congress since 1988, representing affluent Orange
County near Los Angeles. As a lawmaker, he has advocated lower
investment income taxes and was an architect of a 1995 law that made it
more difficult to sue cor****ations.
Cox said he was impressed by the SEC when he worked as a private
securities lawyer. "The rule of law that the SEC enforces has given
America the most dynamic and vibrant capital markets in the world," he
said.
Some academics said Bush's choice may signal a move away from
pro-active protection of investors and the beginning of a more
hands-off SEC approach to policing markets and companies.
"He'll be a formidable chairman, but it will be a major change in
direction," said Columbia University Law School Professor John Coffee.
"This is about as dramatic a ****ft in the tenor of the commission, in
the middle of a presidential term, as we have ever seen," said Joel
Seligman, dean of the Wa****ngton University Law School in St. Louis and
a noted SEC historian.
"You're more likely to see an SEC that the Chamber of Commerce and
the Business Roundtable are more comfortable with," he said.
Cox would be the first sitting congressman nominated to chair the SEC
-- a development that Seligman said raises questions about politicizing
the agency, which traditionally tries to hold itself apart from
Wa****ngton politics.
REUNITING SEC REPUBLICANS
Cox's arrival is expected to reunite the three Republicans on the
five-member SEC. Donaldson relied on the sup****t of two Democratic
commissioners to win approval of new rules for mutual funds, hedge
funds and stock trading and pricing.
In addition to angering some business interests with close White House
ties, these rules frayed relations between Donaldson and his
fellow-Republican commissioners, Paul Atkins and Cynthia Glassman.
The two Democratic seats on the SEC are also in flux. Senate Democrats
have asked Bush to nominate top SEC staffer Annette Nazareth to replace
Commissioner Harvey Goldschmid, who is leaving to return to teaching at
Columbia University. SEC Commissioner Roel Campos is seeking
renomination this year.
DONALDSON FOLLOWED PITT
Bush brought in Donaldson -- former New York Stock Exchange head
and co-founder of investment bank Donaldson Lufkin & Jenrette -- in
2003 to calm the SEC amid cor****ate scandals and after the resignation
of former chairman Harvey Pitt.
Lawmakers and Bush praised Donaldson, but it was clear he had
overstayed his welcome among some Bush advisers and cor****ate
lobbyists.
The U.S. Chamber of Commerce and lobbying groups for mutual funds and
brokerages strongly sup****ted Cox, who specialized in venture capital
and cor****ate finance from 1978 to 1986 with the law firm of Latham &
Watkins in southern California, a high-tech center.
Technology companies have been pu****ng the SEC to postpone a new
accounting standard to require stock options to be treated as a routine
business expense.
Cox also worked as a White House counsel to former President Ronald
Reagan. On his Web site, Cox describes himself as "a leading advocate
of economic growth through lower taxes, free enterprise and limited
government."
Rebecca Cox, the congressman's wife, works at Continental Airlines and
previously was a White House staffer.
Most of Cox's personal investments are in mutual funds and investment
retirement accounts, rather than individual stocks, according to his
2003 congressional financial disclosure. He will have to update his
disclosure in the nomination process.
Cox's congressional district is home to Pacific Investment Management
Co., a major investment firm with affiliates that agreed last year to
pay more than $20 million to settle SEC charges involving failure to
disclose payments made to brokers for promoting PIMCO mutual fund
shares.
(Additional re****ting by Steve Holland, Jeremy Pelofsky, John Poirier
and Karey Wutkowski)
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