Risk & Compliance

If McCain Were President He’d Fire Cox

Republican nominee says in Iowa campaigning that the SEC chaiman has "betrayed the public's trust."
Roy HarrisSeptember 18, 2008

Senator John McCain said that if he were president he would immediately fire Securities and Exchange Commission Chairman Christopher Cox because “in my view he has betrayed the public’s trust.”

The Republican nominee for president made the statement while campaigning in Cedar Rapids, Iowa. “If I were president today, I would fire him,” he said, according to press reports. The remarks had been prepared for delivery, according to the Wall Street Journal online edition.

Cox, a former Republican senator from California, was appointed to the SEC job by President George W. Bush in 2005. The president has continued to stand by Cox, and, according to Reuters, a spokeswoman for the White House repeated today that the SEC chairman continues to have the president’s support.

A spokesman for the SEC didn’t immediately respond to a CFO.com request for comment on Senator McCain’s criticism of Cox. In a public statement issued shortly after this story was first published, Cox said “While I have great respect for Senator McCain, we have sometimes disagreed, and this is one such occasion.” Cox cited a long list of SEC actions taken in response to the current market crisis, adding, “The best response to political jabs like this is simply to put your head down and not lose a step doing the best job you can possibly do on behalf of those you serve. For my part, I plan to do just that. I leave the political campaigns to pursue their own course.”

McCain, of Arizona, also called for a new Mortgage and Financial Institutions trust, or MFI, to work with regulators and the private sector to strengthen markets. His Democratic opponent, Illinois Senator Barack Obama, also supports the MFI trust.

In his Iowa remarks, Senator McCain said that the trading rules being overseen by Cox’s SEC had turned “our markets into a casino,” and he singled out naked short selling, “which simply means that you can sell stock without ever owning it.” In the latest crisis, speculators “pounded the shares of even good companies into the ground,” he said, according to the Reuters report.

In recent days, Cox also has been campaigning for rules to force hedge funds and other investors to expose their short positions.