Risk & Compliance

SEC’s Goldschmid Might Stay Longer

Scheduled for September, the commissioner's exit could leave the SEC with only one Democrat.
Stephen TaubJune 17, 2005

Securities and Exchange Commissioner Harvey Goldschmid might stay on for a little longer than planned, according to published reports.

One of two Democrats among the five commissioners, Goldschmid’s term actually officially ended in June 2004. Under federal law, commissioners can remain at the SEC until replaced, or for a period of about 18 months, according to The Wall Street Journal.

Based on published reports, Goldschmid has been purposely vague about his exact departure date, only saying that he is committed to returning to his teaching job at Columbia Law School in the fall.

With SEC chairman William Donaldson leaving at the end of June, and the fate of fellow Democrat Roel Campos—whose SEC term ends in June 2005—undecided, lawmakers are encouraging Goldschmid to stay until his replacement is named. In that way, the two remaining Republican commissioners won’t enjoy even a brief majority stint, says the Journal.

Even if Goldschmid stays on, the SEC will have three Republicans once President Bush’s new nominee for SEC chairman is confirmed. Bush nominated Rep. Christopher Cox, (R.-Calif.) to succeed Donaldson. The confirmation hearings are slated to start in July.

It’s doubtful, however, that Goldschmid would remain at the SEC past September, when the new school term goes into full swing.

As a result, Senate Minority Leader Harry Reid has asked the White House to re-nominate Campos and replace Goldschmid with Annette Nazareth, the SEC’s director of market regulation, according to reports.

Having a Republican majority at the SEC doesn’t always guarantee a vote along party lines. Donaldson, a Republican, has sided with the two Democrats on some critical votes, including one that imposes stronger governance rules on mutual funds and another requiring that hedge funds register with the SEC by next winter.

However, there is speculation that the two sitting Republicans—Paul Atkins and Cynthia Glassman—might try to undo some of the new rules passed by the current group.