A day after William H. Donaldson announced he would retire as chairman of the Securities and Exchange Commission, President Bush nominated a conservative Congressman as his replacement.
Bush on Thursday nominated U.S. Rep. Christopher Cox, R-Calif., a Harvard-trained lawyer who was first elected in 1988.
"I've given Chris a clear mission - to continue to strengthen public trust in our markets so the American economy can continue to grow and create jobs,” Bush said.
Cox helped rework the Private Securities Litigation Reform Act of 1995, which made it more difficult for investors to file lawsuits, the New York Times reported. It was the only legislation to become law over a veto by President Bill Clinton.
As a member of Congress, Cox sought a delay from the Financial Accounting Standards Board on new accounting rules that would eliminate favorable treatment of some mergers. He supports repealing the estate tax, the capital gains tax on savings and investment, and taxes on dividends.
Donaldson, a Republican, often sided with the two Democrats on the five-member commission, sparking criticism from some - the U.S. Chamber of Commerce for one - that he was too quick to impose new, heavy-handed regulations.
Donaldson, 74, said disagreements with Republican members of the commission were not behind his decision to retire at the end of June. He noted that 99 percent of the votes were unanimous. "I have repeatedly said I serve at the pleasure of the president and at my own pleasure," he said at a press conference. "I believe the time has come for me to drift off into the private sector."
Donaldson's positions, which included stronger oversight of hedge funds to new independence requirements for the boards of mutual funds, sparked a backlash among business groups.
He would not say whether business groups pushed for his removal. He did say, however, that some raised “legitimate” concerns about the cost of new internal controls requirements.
Joel Seligman, an SEC historian and the dean of the law school at Washington University in St. Louis, told the Wall Street Journal that Donaldson ran ran up against "an era of more ferocious partisanship than we've seen at the SEC the New Deal period."
Donaldson joined the SEC is early 2003, following the stormy tenure of Harvey L. Pitt. Donaldson was a former chairman of the New York Stock Exchange and founder of one of the country's biggest brokerage houses, Donaldson, Lufkin & Jenrette.