With a backlog of mutual fund and hedge fund cases at the Securities and Exchange Commission, the departure of two Democratic commissioners and Chairman Christopher Cox’s unusual vote in favor of two contradictory proposals on shareholders’ rights to nominate board trustees, the future of the SEC is in question, the Los Angeles Times reports.
But as recently as this past summer, the SEC seemed like a unified group, and Cox was being heralded for creating a sense of unity at the SEC, which had been known for acrimony for years.
“If you’re looking at a man trying to hold the moderate group, trying to maneuver through very partisan waters and come out above it,” the SEC’s testimony before the Senate financial services committee in June “is as good an exhibit of that as you will find,” said Damon Silvers, associate general counsel at the AFL-CIO.
“Chris Cox has done a fine job of leading the Commission,” said Harvey Goldschmid, a former SEC commissioner and now a law professor at Columbia University. “But he is now entering a period where his leadership skills and ability to remain on a balanced course will be severely tested.”
Shareholder activists are now sharply critical of Cox for voting in favor of two contradictory proposals on shareholder rights. The first would prevent shareholders from being able to recommend board members. The other would only allow shareholders with holdings of at least 5% of outstanding stock, held for at least a year, to nominate directors.
“Certainly, when you have a chairman vote for two conflicting proposals at the same time, it’s problematic,” said Lisa Woll, chief executive officer of the Social Investment Forum. “It’s very unclear from his votes what his actual view is, because he’s taken two views.”
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