Wednesday, 25 May 2016
Last updated 1 hour ago
Jan 22 2009 | 12:24am ET
Securities and Exchange Commission Chairman Christopher Cox has resigned in advance of the confirmation of President Barack Obama’s choice to succeed him, Mary Schapiro.
Cox’s resignation took effect on Tuesday, Inauguration Day. The former Republican congressman from Southern California had led the embattled agency for more than three years, and had pledged to leave it at the end of former President George W. Bush’s administration.
Cox took the SEC’s helm after the resignation of former Chairman William Donaldson. Although a Republican, Donaldson frequently sided with the SEC’s two Democratic commissioners in imposing hefty fines and supporting tighter regulation, including the agency’s rule requiring hedge fund registration. That effort was struck down by a federal appeals court, and, under Cox, the SEC did not readopt it.
As chairman, Cox sought to tamp down on public spats between commissioners who favored greater regulation and those on his side who opposed such moves. His first two years in office were marked by relative tranquility and unanimity on the commission, although he proved less averse to regulation than his conservative voting record in Congress might have suggested.
But since the beginning of the subprime mortgage crisis a year and a half ago, the SEC lurched from one disaster to the next as the agency was sharply criticized, both from within and without, for its enforcement failures. The SEC received another blow when it was revealed that several agency probes of Bernard L. Madoff Investment Securities failed to uncover an alleged $50 billion Ponzi scheme.
Just before Christmas, Cox told the Washington Post that he regretted one of his signature efforts to slow the growing financial crisis was the temporary ban on short-selling financial stocks he imposed on Sept. 19. He called it the biggest mistake of his tenure. The ban expired on Oct. 8.
Schapiro is a former interim chairman of the SEC and a former chairman of the Commodity Futures Trading Commission. At a hearing on her confirmation last week, she told the Senate Banking Committee that she might seek to reinstate the hedge fund registration requirement. Obama may appoint an interim chairman until Schapiro’s approval by the Senate.