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August 23, 2005

Congressional Sources: Cox Will Sail Through

By Gregory Bresiger

(Traders Magazine, August 2005) -- Democrats, already gearing up for the possible battle over the new U.S. Supreme Court nominee, are prepared to let the nomination of the next Securities and Exchange Commission chairman sail through Congress with little debate. That's what various congressional lobbyists, who didn't want to be quoted by name, told Traders Magazine about the nomination of Congressman Christopher Cox. He was named by the Bush administration to succeed William Donaldson, a controversial SEC chairman appointed by President Bush. Donaldson often voted with the two Democrats on the commission.

"I'm told that everyone wants to get Chris Cox through as quickly as possible, perhaps before Congress goes home for the summer," said one trading industry lobbyist. While the Democrats are ready to be cooperative, several lobbyists said, they expect the Republicans to compromise.

A congressional source said that, "The two Democratic seats on the SEC are also slated to be vacated and the Democrats will vote for Cox. That is if the Republicans will vote for Democratic commission members. With the departure of Donaldson, three of the five-person commission will likely change this year. Commissioner Harvey Goldschmid is expected to return to teaching at Columbia University Law School. Commissioner Roel Campos, the other Democrat on the SEC, is seeking a second term. The source added that the Democrats would like "to do it all in one package. This would ensure that the SEC retains the same composition-three Republicans and two Democrats." Meanwhile, the Wall Street Journal recently railed against a rumor that a key SEC staff member may be named to one of the commissioner vacancies.

"The Bush administration could start (reform) by making clear that it has the intention of promoting Annette Nazareth, the current director of market regulation and a policy ally of Mr. Donaldson, to one of the two Democratic SEC Commissioner slots. That would be one small step toward restoring the agency's respect for the rule of law," the Journal wrote in a recent editorial.