Cox Promises To Be ‘Vigilant’ For Investors

Rep. Christopher Cox, nominated to succeed William Donaldson as chairman of the Securities and Exchange Commission, said he would push for “vigorous enforcement” of securities laws.Mr. Cox, speaking before the Senate Banking Committee, said the commission must protect the American financial industry through its rule-making and enforcement policies, as well as guarantee the markets will continue to operate in the event of another terrorist attack.“My top priority will be vigorous enforcement of our nation’s securities laws,” Mr. Cox, a Republican from California, said. “The commission must be vigilant on behalf of investors and stalwart against fraud and unfair dealing.”The 52-year-old Mr. Cox appealed to the committee that will decide whether to forward his nomination to the full Senate for a confirmation vote. The committee chairman, Senator Shelby of Alabama, a Republican, said he would call a vote tomorrow.Senator Schumer of New York and senators Feinstein and Boxer, Democrats of California, spoke on behalf of Mr. Cox, signaling that Democrats will not wage a major battle against his confirmation. Mr. Schumer said it’s clear that Mr. Cox is pro-business, “but an examination of your record, and certainly our discussions, indicate you are pro-regulation as well.”The White House may have blunted Democratic opposition to Mr. Cox by nominating Roel Campos and Annette Nazareth, who had been recommended by Senate Democrats, to fill the two Democratic seats on the five-member commission. Their nominations also will be voted on by the committee tomorrow.President Bush nominated Mr. Cox to succeed Mr. Donaldson, who left the agency on June 30. Mr. Donaldson boosted the power and profile of the SEC during his two-and-a-half year tenure, bucking business groups and fellow Republican commissioners to impose new regulations on hedge funds, mutual funds, and stock trading and to enforce securities laws.A key question for supporters of these regulations is whether Mr. Cox, whose pro-business record in Congress includes voting for rules making it harder for investors to sue public companies, will seek to roll back some of them.Public Citizen, the AFL-CIO, and the U.S. Council of Institutional Investors yesterday urged the Senate to conduct a thorough review of what Public Citizen called Mr. Cox’s “anti-investor record.”The consumer group, founded by Ralph Nader in 1971, said in a report that Mr. Cox has been “surprisingly inactive” in moving securities-related legislation in Congress, supported the Sarbanes-Oxley law of 2002 only late in the legislative process, and came down on the side of investors once in 22 votes on what the group considers “major legislation” on corporate and accounting reform, investor rights, and protection of retirement investments.A White House spokeswoman, Erin Healy, reiterated Mr. Bush’s support for Mr. Cox, calling him “a leader in passage of major securities laws that have been enacted over the last two decades.”Mr. Donaldson, in many key votes during the past two years, joined the panel’s two Democrats to approve new regulations by a 3-to-2 margin. Senator Carper, a Democrat from Delaware, asked Mr. Cox yesterday what would have happened to those regulations had he been the chairman instead of Mr. Donaldson.“Senator, I don’t know,” Mr. Cox replied. He declined to second-guess Mr. Donaldson, calling him “a stand-up guy in very tough times” who built a record “of great achievement.”In another exchange, Mr. Cox agreed with Senator Sarbanes of Maryland, the committee’s ranking Democrat, that the SEC and Congress should generally defer to the Financial Accounting Standards Board on setting rules for accounting firms. Mr. Sarbanes said he wondered how to square Mr. Cox’s vow to be an investors’ advocate with statements by those who expect him to lead “a marked diminution in regulation.” Mr. Sarbanes asked, “Were they all anticipating something we need to know?” Mr. Cox said suggestions he would be lax in enforcement are “just wrong.”He said much of the opposition stems from his work on the Private Securities Litigation Reform Act of 1995, which made it more difficult for investors to sue for misconduct. Congress enacted the law over the veto of President Clinton. Public Citizen said the law “made it substantially more difficult for investors to sue to recover losses due to fraud.”Mr. Cox, a graduate of Harvard law and business schools, was previously a partner at the law firm Latham & Watkins.

Cox Promises To Be ‘Vigilant’ For Investors

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