SEC Chairman To Step Down

by Glen Shapiro, LawAndTax-News.com, New York

03 June 2005

Securities and Exchange Commission Chairman William H. Donaldson announced on Wednesday that he would step down on June 30, 2005. Charged with 'cleaning up' the corporate sector after Enron and other scandals, Mr Donaldson went further than expected and has come to be seen as an enemy in many parts of the economy.

Mr Donaldson, 74, is the 27th Chairman of the United States Securities and Exchange Commission and was appointed by President Bush in 2003. He offered the following remarks:

'When I assumed the Chairmanship of the Securities and Exchange Commission roughly two and one-half years ago, public confidence was severely undermined, reflecting the corporate and financial scandals that had shaken the nation. Thanks to the dedicated efforts of the many professionals who serve at the SEC, this period has represented an extraordinarily active and effective time for the Agency. It may well be remembered as the most consequential and productive period in the Commission's history since its founding in 1934.

'I have been honored to serve as Chairman. Although there will always be more work to be done to preserve and enhance the integrity and strength of our nation's corporations and markets, I believe the time has come for me to step down and return to the private sector and my family.'

Mr Donaldson's tenure at the SEC has seen the establishment of the Public Companies Accounting Oversight Board, the implementation of the contentious Sarbanes-Oxley legislation, a substantial strengthening of mutual fund and hedge fund oversight, and a slew of mostly successful actions against errant securities firms and their staff.

The White House is expected to nominate Rep. Christopher Cox, a California Republican, to succeed Mr. Donaldson. President Bush said that Mr Donaldson "fairly enforced our nation's securities laws and helped rebuild the public trust in corporate America."

Time and again during Mr Donaldson's reign at the SEC, he used the votes of his two Democrat co-commissioners to force through rulings that were bitterly disputed by the two Republican commissioners.

Representative Cox, 52, a lawyer by training, has recently been in the headlines as Chairman of the first House Committee on Homeland Security. He was a White House counsel during the Reagan administration and a corporate finance attorney with the law firm of Latham & Watkins.

Business will welcome the appointment: "We've got to get back to a balance here," said Thomas Donohue, president of the US Chamber of Commerce. "We're going to go into another phase here now...and it's the phase that says, 'OK, we have restored some measure of confidence to the markets and the American business system -- but we need to be very careful going forward to protect those parts of the system that make us unique.' "

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