SEC's Future Up for Debate

As the Bush administration makes plans for its second term, a looming question is whether Securities and Exchange Commission Chairman William Donaldson will remain a part of it.

The Associated Press reported that while Donaldson's term isn't up until 2007, business groups are pressuring the administration to replace him with someone more sympathetic to their interests.

Donaldson, a Republican and former investment banker who previously led the New York Stock Exchange as well as Aetna Inc., has surprised many in the business community by being a staunch advocate of reform, a chairman who is willing to cross party lines to vote his conscience.

He has supported a number of plans that the business community strongly opposed, including advocating stricter controls over the mutual fund industry and enhanced oversight of the financial sector, the AP reported.

"Put 200 executives in a room, they will say we have seen enough regulation and legislation to stop for a while. But is that really the truth? ... We still need more effective regulation," Paul Lapides, director of the Corporate Governance Center at Kennesaw University in suburban Atlanta, told the AP.

With the insurance industry the latest to be hit by scandal-on the heels of the mutual fund industry and massive corporate meltdowns at Enron, WorldCom and others-Donaldson's reform efforts have been heralded by many.

Donaldson replaced Harvey Pitt in 2003 after Pitt's tumultuous 14-month tenure that embarrassed the Bush administration. The SEC has also been lapped in recent years by the aggressive corporate crime-fighting campaign led by New York Attorney General Eliot Spitzer, the AP reported. However, the SEC has taken the lead on accounting fraud investigations involving HealthSouth Corp. and Qwest Communications International Inc.

On the flip side, Donaldson has refused to take quick action to appease shareholder groups who have sought more power to nominate corporate board candidates, the AP reported.

In comments to reporters after a speech to the annual meeting of the Securities Industry Association, Wall Street's biggest trade group, Donaldson didn't show his cards entirely.

"I serve at the pleasure of the president. Having said that, I also serve at my own pleasure. And by that I mean, I believe that there are a number of things we're working on, a number of things I know we're accomplishing, and as long as we're accomplishing those things, that's pleasing," he said.

You may like these other stories...

By Alexandra DeFelice Can you sleep soundly at night knowing your firm is safe from data security breaches? We've all heard the stories of stolen laptops, hacked computers, and begrudged employees leaving the firm...
Two upcoming web seminars will focus on security related issues. The first, scheduled for October 25, will look at proven methods for measuring security. The second, to be held November 1, will explore the next generation of...
The Small Business Administration (SBA) released figures on its post-9/11 disaster lending program showing that $245 million of the total $1.2 billion lent is currently in default, representing a 20.4 percent default rate....

Already a member? log in here.

Upcoming CPE Webinars

Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.