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Thursday, January 05, 2006
No Slack at Cox's SE
Christopher Cox's Securities & Exchange Commission isn't turning out to be the corporate-friendly place that many in the boardroom set were hoping for -- or expecting. In the SEC chairman's first major policy move, as outlined by BusinessWeek Online in late November, the commission issued standards on Jan. 4 for fining companies that commit financial fraud (see "Corporate Fines: The SEC's Search for Rules"). With that action, Cox locked in a key legacy of his predecessor -- William H. Donaldson, who angered much of Corporate America with his stiff regulation and tough enforcement -- and rejected the conservative line that corporate penalties do more harm than good.
To issue the new standards, Cox had to win over his two felllow Republicans, Commissioners Paul Atkins and Cynthia Glassman. The GOP duo often took exactly that conservative line in dissenting from civil fines imposed by Donaldson's SEC. "There was significant sentiment to go toward Atkins and Glassman," says a top former SEC staffer.
ENRON EFFECT. That would have meant barring corporate penalties in cases where the fraud hurt only the company's own shareholders. "Instead, they stuck with the standards that we used for the last three to five years," the ex-staffer says. "That's going to disappoint some people."
posted by Anonymous @ 9:59 AM
 
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