The Securities and Exchange Commission may undertake some major policy transformation as changes in top personnel could shift the balance of power, Reuters reports.
SEC Commissioner Harvey Goldschmid, a Democrat, plans to resign this summer and return to teaching at Columbia University. While this may be great news for Columbia, it is likely to put at risk the entire course of policy regulation reforms affecting mutual funds, hedge funds and stock trading forged by Goldschmid and Republican SEC Chairman William Donaldson.
Two other Republican SEC commissioners, Paul Atkins and Cynthia Glassman, have become increasingly alienated from Donaldson and critical of his initiatives, according to Reuters. To boot, some members of the business community are openly contesting reforms championed by Donaldson, who is now left to challenge the growing resistance to heightened regulatory scrutiny.
The U.S. Chamber of Commerce is suing the SEC over its decision to increase the number of independent directors, while Hedge Fund Opportunity Partners is fighting the Commission in court over the rule-required registration for hedge funds. These initiatives are in addition to the sizeable cost burdens of complying with Sarbanes-Oxley, passed by the Congress to toughen corporate audit in the wake of Enron.
As critics for the Commission's policy are likely to continue hurling stones from both outside the Commission and within, the question of how much longer the 73-year-old Donaldson will remain at the Commission linger.
"This is definitely a period of transition at the SEC," said Barbara Roper, director of investor protection at the Consumer Federation of America.
"The agenda and the tenor of the agency seem to have been set largely by the relationship between Chairman Donaldson and Commissioner Goldschmid. With that changing and a number of key staff positions changing, there's a potential that a very different SEC will emerge."
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.