In the department of you heard it elsewhere first William Donaldson has announced that he is stepping down as the Chairman of the Securities and Exchange Commission and is planning a return to the private sector. Donaldson's move follows the recent resignation of Stephen Cutler, the SEC's Director of Enforcement.

Donaldson was a family friend of President Bush when he was tapped for the SEC position in 2003, replacing the embattled Harvey Pitt. He has cited family reasons for the timing of his departure. Donaldson surprized many with the aggressiveness of his regulatory regime and questions loom about how the culture of the SEC will change after his departure. A word or two about Donaldson's tenure via CNN.com:

In a two-and-a-half-year tenure Donaldson pushed through tough new rules for mutual funds, hedge funds and stock trading and pricing that set a high-water mark for the SEC's reform effort following the Enron scandal.

"I have been honored to serve as chairman," Donaldson said in a statement. "Although there will always be more work to be done to preserve and enhance the integrity and strength of our nation's corporations and markets, I believe the time has come for me to step down and return to the private sector and my family."

The 73-year-old former investment banker has led the SEC since early 2003, drawing criticism from both business lobbyists, who called him too heavy-handed, and investor activists, who called him too gentle.

The morning scuttle is that President Bush has already selected the person he will nominate as Donaldson's successor, House Member Chris Cox of California. The LA Times had this to say of Cox:

Cox, 52, is chairman of the House Homeland Security Committee, and a veteran of the Financial Services Committee. The holder of a business and a law degree, he has voted for legislation to make it easier for companies to defend against securities fraud lawsuits.

Cox supported the Sarbanes-Oxley Act of 2002, Congress' response to financial scandals at Enron Corp., WorldCom Inc. and other large companies. The law ordered the most far-reaching changes in corporate accountability since the Depression, imposing stiff new rules on companies and their top executives. He also is a longtime advocate of repealing taxes on capital gains as well as on dividends.

Also pending is the departure of SEC Commissioner Harvey Goldshmidt, who has announced his intent to leave the agency by late Summer to return to his teaching position at Columbia University. Senate Democrats have suggested that the president nominate the SEC's market director, Annette Nazareth, to fill Goldschmid's slot.

-- MDT

Labels: Enron