In a surprise move, Securities and Exchange Commission Chairman William Donaldson said late Wednesday that he will step down on June 30, prompting President Bush to nominate California Republican Christopher Cox as his replacement, according to published reports.
During his two and a half years at the helm, Donaldson pushed through more stringent rules governing mutual funds, hedge funds and stock trading and pricing in response to the wave of corporate scandal that has pervaded Wall Street.
Cox, 52, chairs the House Homeland Security Committee and was elected to Congress in 1988 from California's Orange County. As an elected official, he championed repealing the estate tax, the capital gains tax on savings and investment and taxes on dividends.
The SEC took a lot of flack for being behind the eight ball on the market timing and late trading scandals that roiled the mutual fund business, which ultimately served as a catalyst for many of the reforms the agency promulgated. Donaldson's time as chairman "may well be remembered as the most consequential and productive period in the Commission's history," Donaldson said in a prepared statement.
"I have been honored to serve as chairman," he continued. "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."
His resignation comes on the heels of the anticipated departure later this summer of SEC Commissioner Harvey Goldschmid, who plans to step down in July or August. Goldschmid and Donaldson have largely set the SEC's reform agenda over the past two years, which drew criticism from Commissioners Cynthia Glassman and Paul Atkins, along with some high-profile members of the asset management community.
"Under Chairman Donaldson, the Commission undertook comprehensive reform aimed at protecting fund investors and bolstering their confidence in fund investing as a vital tool to achieve their long-term financial goals," said Investment Company Institute President Paul Schott Stevens. "The Institute, which has supported the majority of the reforms developed during his tenure, pledges itself to continuing to work constructively with the Commission's future leadership."