Naming of Cox to SEC Gets Mixed Reception

The Newport Beach Republican likened executive cheats to "bacteria" as he sought to rally House colleagues in favor of the landmark Sarbanes-Oxley anti-fraud law of 2002.

But on Thursday, after President Bush nominated Cox to head the Securities and Exchange Commission, some corporate critics said the congressman's long-term record raised fears that he would seek to roll back regulations that have helped to restore investor confidence in business and markets.

His sponsorship in 1995 of a law aimed at limiting shareholders' ability to sue companies for alleged securities fraud has quickly become a defining issue for those concerned about Cox's appointment as SEC chief.

"We consider it one of the most anti-investor pieces of legislation to have been considered in Congress in the last two decades," said Barbara Roper, head of investor protection at the Consumer Federation of America.

Supporters, however, painted Cox as someone who could strike a delicate balance: preserving the major reforms enacted in the wake of the financial scandals that began with Enron, while defusing the business backlash over some of the rules the SEC pursued in reaction to those scandals.

Introducing Cox at a White House ceremony, Bush suggested that his nominee had the attributes needed to bridge divergent views of the SEC's role as the nation's financial regulator.

"He proved that he can bring people together of diverse opinions to get things done. That kind of leadership will be invaluable as the chairman of the SEC," Bush said.

If confirmed by the Senate, the 52-year-old Cox -- low-key, cerebral and a classically conservative Republican -- would replace William H. Donaldson, who announced his resignation Wednesday after presiding over a stormy two years at the agency.

Donaldson, 74, surprised Wall Street by leading an aggressive rule-making campaign that caused a deep split with his fellow two Republicans on the five-member SEC panel and triggered accusations from business interests that the agency was going too far with reregulation.