A day after Securities and Exchange Commission Chairman William Donaldson announced that he would step down from his post at the end of the month, President Bush announced his nomination of Republican Congressman Christopher Cox of California as the next head of the SEC.
"Chris will vigorously enforce the rules and laws that guarantee honesty and transparency in our markets and corporate boardrooms. He will be an outstanding leader of the SEC," President Bush said in making the announcement early Thursday. "Bill Donaldson has set high standards for American business and the SEC, and Chris Cox is the right man to carry on this important work."
The president said that Donaldson, who announced Wednesday afternoon his plans to leave the commission to return to the private sector at the end of the month, "has done an exceptional job as SEC chairman."
"Bill took this post at a time when our economy was faced with a crisis in investor confidence. Under his leadership, the SEC vigorously responded to corporate corruption," President Bush said, noting that the commission filed more than 1,700 enforcement actions under Donaldson's chairmanship.
Donaldson, who turned 74 this week, was appointed to the SEC by President Bush in 2003, when the agency was still reeling from the departure of former chair Harvey Pitt, who resigned under pressure from the administration after a series of gaffes that culminated in his flubbed appointment of William Webster to head the Public Company Accounting Oversight Board.
A former investment banker who helped found Donaldson, Lufkin & Jenrette, Donaldson was also a former New York Stock Exchange chairman, chief executive of Aetna and a founder of Yale University's Graduate School of Management.
During his two-and-a-half years at the SEC, Donaldson was praised for demonstrating what was seen by some as an independent streak, and criticized by others, who viewed him as being too heavy-handed.
Donaldson reportedly downplayed suggestions that disagreements over policy matters were the reason for his departure, saying, "I have repeatedly said I serve at the pleasure of the president and at my own pleasure. I believe the time has come for me to drift off into the private sector."
As soon as he took the helm of the agency in February of 2003, Donaldson was charged with the task of implementing the landmark Sarbanes-Oxley Act and with selecting a new chairman for the then-new PCAOB. His tenure was marked by a focus on strengthening corporate governance, controversial measures to increase mutual fund disclosures to shareholders and a push for greater oversight of hedge funds.
In recent weeks, the commission has come under scrutiny after a reported budget shortfall and an audit by the Government Accountability Office found that the commission didn't maintain effective internal control over financial reporting because of material weaknesses in three areas, including information security.
Cox, who was elected to Congress in 1988, is the first chairman of the House Committee on Homeland Security. His nomination must be confirmed by the Senate.
A graduate of Harvard Law School and Harvard Business School, he worked as a security lawyer for nearly a decade, and served as senior associate counsel to President Ronald Reagan.
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