David Kirkpatrick

January 23, 2009

Goodbye and good riddance Cox

I’m with this story. Couldn’t happen too soon and if nothing else, the SEC will be headed up with a lot more competence. Hopefully a whole lot more.

From the link:

Christopher Cox has packed up as chair of the U.S. Securities and Exchange Commission, leaving behind a demoralized agency that failed to spot Bernard Madoff’s alleged mega-fraud or forestall the collapses of Bear Stearns and Lehman Brothers.

His resignation took effect yesterday, a spokesperson said.

During Cox’s 3 1/2 years, the SEC was criticized by lawmakers, investors and its own inspector general as lacking aggressiveness and being deferential to Wall Street banks.

U.S. President Barack Obama picked a fellow Democrat, Mary Schapiro, the head of the U.S. brokerage industry’s self-regulator, to succeed the Bush administration appointee.

“I respect Chris Cox, but there’s no question that the commission has been much too passive in area after area under his leadership,” said law professor Harvey Goldschmid, a former SEC commissioner.

“The morale problems and the lack of public regard for the agency must be immediately addressed by Mary Schapiro.”

January 6, 2009

SEC is about to get it from Congress

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 2:09 pm

Can’t say it’s undeserved. This year has been an abject failure of the meager regulatory role the SEC has been asked to perform over recent years. There wasn’t much to regulate, and what little was expected either didn’t happen, or was so incompetent it might have not been there at all.

Probably the incompetence was more damaging than no regulation because it gave all these illegal activities the veneer of legitimacy. I think the current crop of SEC officials, starting with Christopher Cox, should be held liable for some measure of the economic pain facing the US right now.

From the link:

Lawmakers on Monday raised a number of regulatory reform ideas for the Securities and Exchange Commission in light of the agency’s failure to identify an alleged $50 billion Ponzi scheme operated by New York investor Bernard Madoff.

“The inability of the SEC to identify failure at the Madoff funds for almost a decade has exacerbated cynicism among investors and delayed recovery [of the financial industry],” said Rep. Gary Ackerman, D-New York.

Madoff, who was arrested in December and charged with securities fraud, oversaw a fund that managed capital for investors of varying income, hedge funds, banks and institutions including foundations, pension funds and charities.

In response to Madoff’s arrest, a number of lawmakers on the House Financial Services Committee said they want to examine whether legislation should be drafted that reforms the way the SEC inspects investment fund managers, how fund accounting firms are regulated and whether agency commissioners should be prohibited from immediately taking jobs in the financial services industry when they finish their stint at the commission.

Others sought more resources for the SEC’s enforcement bureau and raised concerns about the expertise levels of agency fund oversight officials.

July 28, 2008

SEC and Fed want to toughen rules

This AccountantsWorld.com article outlines an effort by the SEC and the Federal Reserve to press Congress for additional regulatory and supervisory powers.

From the link:

At a Congressional hearing on how to modernize financial regulation, the S.E.C. and the Fed laid out similar, if somewhat competing, visions for a new regime capable of monitoring commercial and investment banks to ensure they remain financially sound in order to prevent another credit crisis.


Both the S.E.C. chairman, Christopher Cox, and the New York Federal Reserve Bank president, Timothy F. Geithner, said that the current patchwork of regulatory agencies, much of which dates back to the Depression of the 1930s, deserved part of the blame for the yearlong financial market turmoil.

But Mr. Cox said his agency should oversee investment banks, while Mr. Geithner said the Fed must have a direct supervisory role over any firms that borrow from the central bank.

”It’s very important that we have a role in consolidated supervision of these institutions because you will not have good judgments made by this central bank, this Federal Reserve, in the future unless we have the direct knowledge that comes with supervision,” Mr. Geithner told the House Financial Services Committee.

June 27, 2008

Is the SEC growing instead?

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 12:22 pm

This post is a follow-up to one earlier this week about a Wall Street Journal article stating the SEC is on its way out and the way the Bear Stearns debacle was handled is a symptom of the disease within the commission.

Christoper Cox, current chairman of the SEC, has vehemently fired back (albeit internally) in response to Monday’s WSJ story.

From the second link:

Rarely in its 74-year history has the Securities and Exchange Commission been so squarely on the griddle, with new reforms seeming to target its very existence and Chairman Christopher Cox personally being criticized as “peripheral,” in the words of a critical Monday profile on the Wall Street Journal’s front page.

Cox has said little publicly about the criticism, much of which relates to his and the SEC’s role in dealing with the collapse of Bear Stearns and its later bailout managed by the Fed. But in internal memos made available to CFO.com, the chairman clearly seems to be simmering close to the boiling point.

In a 17-paragraph memo to the entire SEC staff that started with a note that he was “very disappointed” by the Journal story, Cox defended the SEC’s role in dealing with Bear as “one of a high degree of inter-agency cooperation.” And he noted that the SEC’s position in the case of the bailout was legally limited because the agency could not be “cast in the role of regulator of the merger and also potentially enforcer of the laws against fraud in connection with the transaction.”