June 3, 2005
Cox's Record On Securities Issues
The appointment of Christopher Cox as the new Chairman of the Securities and Exchange Commission has much to say to it. He is politically savy, very smart, and an expert in federal securities law. He also seems to have, what I believe, is the correct regulatory philosphy -- catch and prosecute the crooks but do not tell the country's business people how they run their businesses. On the other hand, when he has been visible in the securities law as a Congressmen, he has taken problematic positions on important issues. He opposed the elimination of pooling accounting for mergers (a silly practice that let firms hide payments for high going concern value firms, giving incentives to high-tech mergers), he opposes the expensing of executive options (a practice that allow firms to hide salary payments, giving incentives to salary in high-tech companies), and he pushed an extreme version of the PSLRA of 1995 that (although not enacted) would have shifted attorney's fees on losses in plaintiff class actions and would have eliminated liabiltiy for "reckless" actions by exectives. The PSLRA changes were a transparent effort to kill class actions indirectly. What bothers me about these moves is that they were round-about efforts to do what could have been done more directly -- with a more open and transparent debate -- based on the policital decision that a clever attack may win while the open debate may lose. I hope he will shed this tendency as SEC chair.
June 3, 2005 | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference Cox's Record On Securities Issues: