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June 02, 2005

Bush Turning SEC Over to Wolves

Post-Enron, the Bush administration hated the new rules regulating corporate corruption and continually fought new laws to restrict corporate power to defraud the public.  His first head of the Securities and Exchange Commission (SEC), Harvey Pitt, ran interference for corporate America during that period, but was forced to resign as it became clear he was blocking reform.

His successor, William H. Donaldson, was picked to restore credibility to the SEC and, while no radical, allied repeatedly with the two other Democrats on the SEC to push reforms of the industry.  But Donaldson appears to have been pushed overboard and has submitted his resignation.  And his likely successor is rightwing former Congressman Chris Cox:

Representative Christopher Cox, 52, a California Republican who has long been an ally of business groups and who helped rewrite securities laws to make investor lawsuits more difficult to file. Mr. Cox could not be reached for comment...

In 1995, he was named a defendant in a lawsuit by investors as a result of legal work he did for an investment group in the 1980's. The suit accused Mr. Cox, his former law firm and two former colleagues of misleading regulators and investors about the condition of a real estate investment fund. Mr. Cox, who denied that he had violated any laws, was eventually dropped from the lawsuit and the firm where he worked, Latham & Watkins, settled for an undisclosed amount.

He said his experience as a defendant had helped shape his views about investor lawsuits and led him "to sympathize with people who are victimized in these suits."

So it's good to know that the SEC will have someone in charge whose sympathy is with corporate defendants, not the consumers and investors ripped off by corporate America.

Posted by Nathan at June 2, 2005 07:18 AM