Friday, June 03, 2005

Shifting the SEC Back Towards Corporate Interests

President Bush has named Christopher Cox, a Republican congressman from California, to replace William Donaldson as Securities and Exchange Commission Commissioner, hoping that Cox will guide the SEC in a more pro-business direction. Donaldson, who replaced the hapless Harvey Pitt, turned out to be more interested in actually regulating the investment markets than conservatives would prefer:
In Republican and business circles, William H. Donaldson has been viewed as the David Souter of the Securities and Exchange Commission, a disappointingly independent choice who sided too frequently with the Democrats.
Back in April, Donaldson sided with the SEC's two Democrats in a 3 to 2 vote to adopt Rule 611, the Trade Through Rule, which would require that brokers obtain the best price for a customer, even if it means buying or selling on a different stock exchange. Bush seems determined to appoint a believer in limited regulation this time around:
Mr. Cox - a devoted student of Ayn Rand, the high priestess of unfettered capitalism - has a long record in the House of promoting the agenda of business interests that are a cornerstone of the Republican Party's political and financial support.
A major recipient of contributions from business groups, the accounting profession and Silicon Valley, he has fought against accounting rules that would give less favorable treatment to corporate mergers and executive stock options.
Cox is expected to ease the regulatory burden of Sarbanes-Oxley and other rules designed to make corporate finances and securities markets more transparent.

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