Talk about leaving with an impression. The likely legacy of Securities and Exchange Commission Chairman Christopher Cox, when he steps down this year after taking on the position in 2005, is likely to be that of ineffectiveness during the worst economic period since the Great Depression, The Wall Street Journal reports.
More than ever, it is likely the SEC will be merged with the Commodities Futures Trading Commission. In 2008, all of the major investment banks ceased to exist due to their outsized exposure to subprime mortgage-linked securities, precipitating the current economic crisis. And Bernard Madoff was found to have scammed $50 billion from investors over a period of decades despite repeated warnings to the SEC.
Cox had the greatest perception of inactivity in the face of this crisis, said Sturm College of Law Professor Jay Brown. People wanted the SEC to be this outspoken proponent of investor protection, reinvigorate its mission and let people know that the SEC was on top of this. [Instead,] it has been one inadequacy after another; it looks like the SEC was asleep at the switch.
Cox assured investors only days before Bear Stearns collapsed that it had adequate capital levels, and was reportedly absent for emergency conference calls the weekend before Bear went bankrupt. Critics are now also emphasizing that President Bush tapped Cox for the position because of his pro-business, free market opinions.
Lynn Turner, formerly chief accountant at the SEC, said Cox is the worst chairman ever due to his failure to protect investors.