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Chairman Cox Addresses SEC Staff

Former Congressman Christopher Cox on August 3 took the oath of office to become the 28th Chairman of the SEC and was sworn in by Federal Reserve Board Chairman Alan Greenspan. On August 4, Cox addressed the SEC staff, following an introduction by Commissioner Cynthia Glassman who served as acting chair until Cox was sworn in. Cox said that his first meeting upon his arrival at the SEC was with Enforcement Director Linda Chatman Thomsen to whom he pledged his unstinting support for the staff. Cox also congratulated his fellow nominees, Roel Campos, who was reconfirmed, and Annette Nazareth who was confirmed as a new commissioner.

Cox said that, as a member of Congress, he learned a great deal about the government's strengths and weaknesses. The SEC is one of its strengths, he said, and its reputation factored into his decision to accept the chairmanship. The U.S. markets are the gold standard of world markets because of investors' faith in the integrity of those minding the store, according to Cox. He complimented the staff for their intellect and hard work and pledged to listen to their views.

There has been much debate in the past few weeks as to whether the SEC should be business friendly or investor friendly, according to Cox, as if they are exclusive. The Department of Commerce serves business interests, Cox said, while the SEC serves investors. What is good for American investors is good for America , in his view. As the investors' advocate, Cox said the SEC has an obligation to seek out others' views about what is important in making an investment decision. An important element to that decision is being able to comprehend company's filings. Cox said that an investor should be able to understand a proxy statement or to compare mutual fund prospectuses without being a detective.

The SEC still faces a number of thorny issues, Cox said. While those in the markets, the hedge fund industry and mutual funds have professional advocates, investors do not. No one is entitled to line jump ahead of the others with their personal interests, he said.

Cox singled out what he referred to as former Chairman Arthur Levitt's "noble effort" to promote writing in plain English in SEC filings. Levitt's vision is still dead-on, according to Cox. It would not be difficult today to find dense legalese in a proxy, a mutual fund prospectus or an SEC rule, however, and Cox said the SEC has to practice what it preaches. Cox said he hopes to build upon the SEC's successes of the past. As former chairman of the homeland security committee, Cox said he had focused on critical infrastructure issues. The capital markets are part of our critical infrastructure, he said, as is the SEC.