Finding a scapegoat within his own party, Republican Sen. John McCain said Thursday that if he were president he would fire Christopher C. Cox, the chairman of the U.S. Securities and Exchange Commission.
“The (SEC) kept in trading rules that let speculators and hedge funds turn our markets into a casino,” said McCain, the GOP candidate for president.
He went on to declare that Cox has “betrayed the public’s trust.”
The candidate’s words came during an extraordinary week in the markets that first saw Lehman Brothers declare bankruptcy. This was followed by the government’s $85 billion rescue of American International Group, the insurance giant.
Christopher C. Cox
McCain actually wouldn’t have the authority to fire Cox if he were president, as presidents cannot remove commissioners of independent regulatory agencies.
But in singling out Cox for criticism, McCain broke with Bush, the man who nominated Cox, then a Republican congressman from California, to lead the SEC in 2005.
McCain also broke with himself, or at least departed from his earlier support of Cox. McCain voted in approval of Cox’s nomination to the SEC post, as did Sen. Barack Obama, the Democratic nominee.
A spokesperson for Bush said that Cox continues to have the president’s support.
And Cox took exception to McCain’s charge that the SEC had tolerated a practice referred to as “naked short selling” that involves short selling stocks without having first borrowed the stocks.
“While I have great respect for Senator McCain, we have sometimes disagreed, and this is one such occasion,” Cox said in a statement.
He then listed steps the SEC has taken to protect investors and to prevent the manipulation of the markets.
Cox closed by saying he has no intention to resign now. Rather, he said will step down at the end of the Bush administration, as he had earlier announced.
Cox, who is 55, succeeded William Donaldson, also a Republican, as head of the SEC.
Donaldson was an advocate of tougher regulations. At the time of his nomination, Cox was seen as being wary of new regulations. However, he went on to receive credit for enforcing existing rules.
“Chris Cox as chairman of the SEC is a lot closer to Bill Donaldson than he is to Chris Cox the congressman on a number of issues,” Democratic Congressman Barney Frank told Fortune magazine in December 2005.
Some people faulted Cox earlier this year for not playing an especially visible part in resolving the Bear Sterns crisis. He has been more visible during the subsequent crises.
The commission that he heads has five members. The chairman is always a member of the current president’s political party. Two of the other commissioners are Republicans, two are Democrats.
The commission’s ranks were depleted for most of the last year because of resignations, a situation that some said weakened its authority.
As of August, it was back to full strength with three new members having a kind of baptism by fire as they came to the group this summer in a time of extraordinary turmoil.
Cox and fellow Republican Kathleen Casey have been joined by Republican Troy Paredes, a former law school professor, and by Democrats Luis Aguilar, a securities lawyer, and Elisse Walter, a former SEC staff member who had been senior executive vice president at the Financial Industry Regulatory Association.
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1 Comments
#1. Hugh Tate 12.02.2008
Jim Cramer for SEC Chairman….remove Mr. Cox…………
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