After two and a half tumultuous years leading the SEC, Chairman William Donaldson, 74, has announced his resignation, to take effect June 30, 2005. His term would have expired in 2007. President Bush has nominated Rep. Christopher Cox (R. California), 52, to serve as Donaldson’s successor. Observers have noted that this sets the stage for a shift in the SEC’s priorities away from new regulation and stepped-up enforcement and towards a more pro-business outlook. In Congress, Cox, a former securities lawyer and now Chair of the House Homeland Security Committee, has opposed a regulatory drive to treat stock options as expenses. He also has a lifetime rating of 87% from the U.S. Chamber of Commerce, meaning that he has voted in favor of the Chamber’s positions on legislation most of the time.
Another SEC Commissioner, Democrat Harvey Goldschmidt, is leaving the SEC on July 15, 2005 to resume teaching law at Columbia University. Congressional Democrats are thought likely to recommend Annette Nazareth, who heads the SEC’s Division of Market Regulation, as Goldschmidt’s replacement.
If Cox is confirmed, he will have the opportunity to make significant changes. The head of the SEC’s Division of Enforcement, Linda Thomsen, has held that post for only a month, and serves at the pleasure of the Chairman. In addition, it is not clear how much longer Alan Beller, head of the Division of Corporation Finance, intends to remain at the SEC.