“Chairman Cox has increased to 34 percent of the S.E.C. work force from 32 percent in 2005 and 29 percent in the 1990s. This investment in investor protection already is paying significant dividends.”
The baldfaced lie above was issued under SEC Chairman Cox about how he had improved the agency enforecement staff to protect investors.
Only not so much.
As Floyd Norris noted, this was a very misleading statistical sleight of hand: “The commission’s enforcement staff had declined in size under his chairmanship. It had just declined at a slower rate than the rest of the staff. When I asked if the enforcement staff would look askance at a company that made a similarly disingenuous claim in an S.E.C. filing, his staff seemed surprised.”
Cox, like his two predeccessors, were wholly unsuitable to be running the SEC.
From Bailout Nation:
Then there is Christopher Cox, a stumblebum of an SEC Chair. Cox was more hapless than anything, unable to successfully navigate the fierce lobbying thrown up by Wall Street.
In July 2007, Cox eliminated the so-called uptick rule, removing a key restraint on shorting just as the credit crunch was getting started. (Not very smart). The market peaked shortly afterwards, and began heading south — with no uptick rule to prevent indiscriminate short selling. Then in September 2008, with the crisis in full flower, the clueless dolt made shorting financial stocks illegal. Apparently, he was unaware that fierce market selloffs are often slowed by short sellers covering their positions (to lock in profits on their bearish bets). Without any short-sellers in the market, the downturn became even worse. From the market highs of October 2007, the S&P 500 and the Dow Jones Industrial Average were cut in half in 12 months. Much of the damage came after the no-shorting rule went into effect. (As GOP Presidential candidate in 2008, Sen. Johh McCain called for Cox’s resignation.)
All I can say is good riddance!
Previously:S.E.C. Chairmen, 2001-08 (December 2008)
Christopher Cox Leaves
NYT, January 21, 2009, 4:53 PM