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SEC Chair Cox Fiddled as US Markets Burned

'Exceedingly cautious' approach had Paulson looking to kill agency

By Nick McMaster, Newser Staff

Posted Sep 22, 2008 3:22 PM CDT

(Newser) – With US markets in upheaval, the head of the watchdog Securities and Exchange Commission was preoccupied with a new technology for corporate filing, Bloomberg reports. Christopher Cox’s inaction has provoked bipartisan criticism: McCain adviser Carly Fiorina said he has been “asleep at the switch,” while Democratic Sen. Chris Dodd has ordered a probe into the drastic drop in SEC enforcement under Cox’s watch.

Meanwhile, Henry Paulson and Ben Bernanke are encroaching on traditional SEC roles: The Fed has put its own examiners into big financial firms, while Paulson has proposed a regulatory overhaul that would eliminate the SEC. “There is a risk that the SEC will be marginalized unless the chairman insists on a seat at the table,” said a former SEC general counsel.

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Christopher Cox delivers a speech, during the annual conference of the international organization and securities commission in Paris on May 28, 2008. (AP Photo)

Treasury Secretary Henry Paulson proposed that the Securities and Exchange Commission be eliminated as part of a regulatory overhaul, to little opposition from the agency's chief, Christopher Cox. (AP Photo)

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A lot of investors are looking at the SEC and saying, 'Where were you with respect to auction-rate securities? And where were you with the securitization process of home mortgages? - Jack Reed , Democratic Senator

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SEC Chair Cox Fiddled as US Markets Burned