The Washington Post reports today that embattled Securities and Exchange Commission Chairman Christopher Cox is defending his restrained response to the country's financial crisis, arguing he has guided his agency with a steady hand while other federal regulators have not.
Our former Republican congressman out of Newport Beach has come under heavy criticism since essentially blaming the largest Ponzi scheme in history on his own SEC underlings. That has led critics to point out that while all of those investment banks collapsed during Cox's tenure, his agency has sat on the sidelines while the Treasury Department and Federal Reserve have worked feverishly on solutions and--most notably--the Man With the Upside Down Smile has taken a very public The-Buck-Does-Not-Stop-Here approach to management.
During his 90-minute conversation with the Post, Cox does an about-face on SEC enforcement efforts he'd days earlier criticized when the Bernard Madoff scandal hit, saying, "We've done everything we can during the last several years in the agency to make sure that people understand there's a strong market cop on the beat. That's why Madoff is such a big asterisk. The case is very troubling for that reason. It's what the SEC's good at. And it's inexplicable."
The thing about asterisks is they don't give you dirty looks in the SEC halls after you've called them out.
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Cox accuses the Fed and Treasury of having freaked out. "When these gale-force winds hit our markets, there were panicked cries to change any and every rule of the marketplace: 'Let's try this. Let's try that.' What was needed was a steady hand," he said.
By comparison, Cox says, "What we have done in this current turmoil is stay calm, which has been our greatest contribution--not being impulsive, not changing the rules willy-nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants." He called that caution "a signal achievement for the SEC."
The story includes analysis from investment experts and former SEC officials who blame Cox for some SEC failures and defend him for others before ending with the big question on everyone's mind: Shouldn't he, as head of the SEC, be blamed for a culture of lax enforcement that allowed multiple warnings about the fraud to go undetected?
"Absolutely not," Cox answers. "In fact, it's in the DNA here that people thrive on bringing big cases."