Confounding His Critics
GOP stalwart Cox sidesteps partisan labels as he settles in as the country's chief financial watchdog
Correction: An earlier version of this story misstated Securities and Exchange Commission Chairman Christopher Cox's tenure in Congress. Additionally, Cox was named in a class-action shareholder lawsuit brought in 1995 for legal work he did in the mid-1980s. Cox was later dropped from this case; his law firm settled for an undisclosed sum.
As the nation's top financial regulator, Christopher Cox frequently describes a framed check for $3.36 that he keeps in his office. The check is made out to his grandfather and represents the tiny recovery the elderly man received from Insull Utility Investments Inc. after it went belly up during the Great Depression. In speeches, Cox has called Samuel Insull "the Ken Lay of his day," adding that the check serves to remind him that, as head of the Securities and Exchange Commission, he is "standing up for the little guy."
But the Insull case is not the only one that has shaped his view of shareholder rights. As an Orange County, Calif., congressman, Cox was once-and he would say unfairly-the subject of a shareholder class-action lawsuit. He went on to push for laws limiting the ability of shareholders to sue, calling the status quo "a legal torture chamber." And Cox says that his views on the subject have not changed one iota since becoming chairman of the SEC.
"The problem of litigation taking too long and costing too much is with us today, even more than it afflicted Dickens's time," he complains, adding that the lawsuit at the heart of Charles Dickens's Bleak House "wended on for generations."
To his critics, such statements are proof that Cox is the proverbial fox in the henhouse, a pro-business lackey intent on dismantling shareholder protections at every turn. But nearly two years after leaving Congress to take the helm of the SEC, Cox has deftly defied attempts to paint him into this corner.
Cox, 52, is steeped in Republican politics, having worked for the Reagan White House before California voters elected him to Congress in 1988 on a free-enterprise platform. Looking back, he expresses no regrets about his votes: "I still strongly believe in economic growth through lower taxes and a whole lot of things I don't have anything to do with as commissioner."
However, while a strong believer in the Republican agenda, he has publicly kept his distance from Bush administration complaints that American markets are suffering from burdensome overregulation. Cox has allowed senior SEC officials to publicly disagree with these claims and has done so himself. America is not overregulated, he says; it merely needs to "keep pace with change."
Cox's diplomatic approach since becoming the SEC chairman is in marked contrast to the reign of his predecessor, William Donaldson, who fought with the commission's two Republican members. Cox has instead sought common ground. "The temptation in Washington is to put politics first," he says. "But ... [when we are] in charge of protecting American investors, we have a responsibility to keep partisanship out."
Some critics give the SEC chairman high marks. Barney Frank, the Democratic head of the House Financial Services Committee who has tangled with Cox, says, "I'd like things to go further, but Cox has generally been helpful in his decisions. He has shown that he understands the difference between being a legislative adviser and a law enforcement officer."
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