There's something fitting about William H. Donaldson announcing his departure from the Securities and Exchange Commission in the same week that the Supreme Court reversed the conviction of the Arthur Andersen accounting firm. Both events mark a return to normalcy for corporate America after the Enron, WorldCom and other scandals roiled confidence in the integrity of this nation's financial markets.
But the all-clear signal shouldn't breed too much complacency in Washington about the need to remain vigilant. Regardless of the legal merits of the criminal prosecution of the now-defunct Arthur Andersen, there is no disputing that in several cases the firm failed miserably to fulfill its duty to protect shareholders, and that the SEC's own negligence helped breed an ideal environment for fraud.
Rep. Christopher Cox, the amiable Newport Beach Republican nominated by President Bush to replace Donaldson, should be mindful of that.
In Congress, Cox has been an ardent supporter of lessening business regulations, but he will have to temper some of his views if he is to succeed in his new job. Whether he will oppose moves to require that companies treat the cost of stock options as expenses affecting their bottom lines will be an early test. His mandate now is to protect capitalism, not just big business.