Testifying on Tuesday before the House Financial Services Committee, the members of the Securities and Exchange Commission defended their habit of continually voting the same way for the past two years.
During Christopher Cox’s reign as chairman of the SEC since 2005, critics have questioned his apparently powerful influence over his fellow commissioners and his ability to garner consensus from them, particularly considering that two of the commissioners, Roel Campos and Annette Nazareth are Democrats while Cox and the remaining commissioners are Republicans.
The commissioners say they have voted unanimously 98 percent of the time under Cox “not because the issues [being decided] are easy, or because we always agree.” Rather, their joint prepared statement notes, “it is because the capital markets of the United States — and now, the world — depend upon clarity and consistency in our regulatory and enforcement programs. The agency’s non-partisanship has underscored that it is the rule of law, not one’s political point of view, that should determine our actions.”
In calling the hearing for Tuesday afternoon, Rep. Barney Frank, a Massachusetts Democrat, asked the commissioners to talk about “investor protection and market oversight” soon after publicly criticizing Cox for siding too often with investors.
Just whose side is Cox on? That question is apparently a sticking point for the commissioners who have often heard that question asked in the past two years. During his chairmanship, Cox has received more pressure to address the issue, particularly in the past year since the Democrats took control of Congress and amid growing sentiment to roll back securities regulation has mounted by pro-business groups.
Defending Cox’s reputation before Frank, the commissioners said the issues they deal with have become “trivialized as disputes between business and investors — as if to be pro-investor is to be anti-business, or to be pro-business is to be anti-investor.” In fact, they said, investors rely on the success of a business when they risk their money in a company’s securities. For that reason, Cox considers the SEC’s role as a partnership with business, they added: “Anyone who seeks to drive a wedge between the interests of the business and the interests of the investors in that business will face a relentless and powerful adversary in the Securities and Exchange Commission.”
In their joint prepared statement, the commissioners gave Frank a list of the regulator’s recent initiatives, including a proposal to eliminate the requirement for foreign companies to reconcile their financial statements with U.S. generally accepting accounting principles and revising the management guidance for the internal-control provision of the Sarbanes-Oxley Act.