William Donaldson was a man of his time. He took over as chairman of the SEC in early 2003, and had to deal with the fallout from corporate scandals like Enron. Donaldson frequently broke rank with the other two Republicans on the five-commissioner SEC, and he came down relatively hard on corporate America until his resignation at the end of June.
Christopher Cox is a man of a very different time. Donaldson's replacement, Cox takes over as U.S. companies increasingly complain the pendulum has swung too far in the direction of regulation and over-sight. Corporate America is likely to find a more sympathetic ear with Cox than it did with Donaldson.
Cox was a Republican member of the House for almost two decades, representing Orange County, California. Before that, he worked as a corporate lawyer and a legal advisor in the Reagan White House. But Cox's focus as a lawmaker provides the best window into what kind of SEC chairman he is likely to be. His two biggest interests on Capitol Hill were national security and corporate regulation. On the former, he fretted about leaks of sensitive technology, missile deployment and terrorist infiltration. On the latter, Cox rarely wavered in his belief that less regulation was better regulation.
In the 1980s and early 1990s, he was affiliated with a group of Newt Gingrich Republicans who worked to dismantle layers of government regulation. More recently, he helped write legislation that limited shareholders' ability to file securities-fraud lawsuits. It may also warm the hearts of technology executives that Cox has led the charge against accounting rules requiring companies to expense stock options.
The past is no guarantee of future performance. But in the case of the nation's new top securities cop, it's a pretty good indication of where his sympathies lie.