The Securities and Exchange Commission, an institution under fire, and with a large job ahead, may finally have a new chairman. A month since embattled former chairman Harvey Pitt resigned, President Bush announced plans to nominate William Donaldson, founder of investment bank Donaldson Lufkin & Jenrette to head the agency.
Donaldson, like many of the President’s appointees, has roots in the Ford administration. He was counsel to Vice President Nelson Rockefeller and was an assistant to then-Secretary of State Henry Kissinger. Donaldson is well known on Wall Street, serving as chairman of the NYSE from 1990-95; his former firm is now part of Credit Suisse First Boston.
The chairman’s job is open at a critical juncture for the SEC. Confidence in the agency has faltered with the Enron and Worldcom scandals, but new legislation—particularly the Sarbanes-Oxley Act, drafted in response to the scandals—gives the agency more vital power. The nomination of a new chairman had been eagerly anticipated since Pitt’s resignation, and Donaldson will have a big job restoring investor confidence in the regulatory framework of the financial markets.
"We switched, rapidly, to a nation of investors from a nation of savers," said bill author Rep. Michael G. Oxley (R-OH), speaking at a Securities Industry Association conference last week. "I think maybe [the SEC] weren’t able to stay ahead of that wave."
Congress will have to approve Donaldson’s nomination, most likely when it reconvenes in January.
The Associated Press contributed to this report.