A divisive rule that would apply stronger government oversight over hedge funds is to be put into effect by the new chairman of the SEC Christopher Cox, according to The Wall Street Journal. Cox said that he wouldn't make any radical shifts in his first few months, but that he wanted to emphasize the SEC's function as a supervisory body. "It's important always to monitor the effectiveness of regulation," Cox said. "If a particular approach is working well and is cost-effective, we should use it as a model. If another approach is unduly expensive and produces little in the way of worthwhile results, we should amend our approach." Cox seems to be playing to both crowds. He doesn't want to draw the ire of big business and the White House but still keep the SEC pure in its duty as watchdog.
In addition, Cox may need to deal with the issue of the SEC's recent tend to use big fines as the punishment for corporate wrongdoers. The argument has been going on for a while, that with these types of punishments, the fines are negatively impacting shareholders.