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
The thing about asterisks is they don't give you dirty looks in the SEC halls after you've called them out.
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
“Absolutely not,” Cox answers. “In fact, it's in the DNA here
that people thrive on bringing big cases.”