Wednesday, June 03, 2009
Chistopher Cox
Things got so bad at the Securities and Exchange Commission under the leadership of former chairman Christopher Cox that dedicated enforcement officials lost interest in doing their jobs to keep Wall Street from breaking the law. This situation evolved out of decisions by Cox and other Republican appointees to the SEC board that let corporate violators off the hook, even after staff documented serious violations of federal law.
According to the Washington Post, Cox and his colleagues drastically reduced fines recommended by career enforcement agents—resulting in an 84% drop in penalties, from $1.59 billion in 2005 to $256 million in 2008. They also got in the way of requests to subpoena executives to testify or turn over documents, and Cox required enforcement officials to see him and other commissioners before approaching a company about negotiating civil settlements.
James T. Coffman, a former assistant director of the SEC’s enforcement division, told the Washington Post that when the investigative process “is interrupted, delayed or denied, it can’t help but have a negative impact on the people who conduct those investigations. Clearly some people wonder, ‘If they don’t want these kinds of cases, why should I bother doing them even though they’re very important?’”
The SEC’s new chairwoman, Mary Schapiro, has begun to undo the damage inflicted on the agency by restoring the power of enforcement officials to negotiate settlements with companies and accelerating the process for authorizing subpoenas and depositions.
-Noel Brinkerhoff
In Cox Years at the SEC, Policies Undercut Action (by Zachary A. Goldfarb, Washington Post)
Christopher Cox (AllGov)
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