I'm sure many journalists were relieved that SEC Chairman Cox admonished the Enforcement Division over subpoenas sent to journalists at Dow Jones.
It also underscores what a "very shrewd" and "good politician," Cox has been since taking office — points made to me by Pat McGurn of ISS last week. (More on the topics McGurn discussed in a moment).
If you believe Cox is swinging the enforcement pendulum back, this subpoena issue was a tailor-made opportunity. What other public rebuke of the Enforcement Division would ensure such a mild press response? (Kudos to Dow Jones's own Wall Street Journal for reporting both angles.)
There's nothing Machiavellian about this: Cox openly stressed the importance of good press relations, and I'm sure he believes in them. Without us ink-stained wretches publicizing enforcement actions, their deterrent effect would certainly be diminished. Still, every ex-SEC lawyer I interviewed after Cox's nomination stressed the independence of the Enforcement Division, so intentionally or not, a public statement criticizing the division carries a subtext.
On the subject of Cox's political ear, McGurn noted that the SEC's crackdown on compensation is almost certainly a direct result of his congressional background. "The sentiment in Washington is very anti-overpaid executives," noted McGurn. "It's a populist issue." Consider, says McGurn, the tax break for repatriated earnings, which companies were prohibited from spending on executive compensation. Of course, notes McGurn, "money is fungible," so the unenforceable restriction amounts to little more than a gratuitous congressional shot at fat-cat executives.
McGurn had other examples, but the take away is that Cox is a very different — and very interesting — type of SEC chairman. He's already clearly quite different than than his last three predecessors. I'll be curious to see what he does next (and how he does it), particularly when it comes to the May 10 roundtable on internal controls, and the issue of exempting small companies from some or all of the internal controls requirements. Stay tuned.