Bush Taps Rep. Cox For SEC Post

California Conservative Is Bush Choice To Lead SEC

(CBS/AP)  The Senate confirmation process has left Cox bruised once before. He was in line for an appointment to the U.S. Court of Appeals in 2001 when Democrats suddenly gained control of the Senate.

Facing opposition from at least one of his home state's two Democratic senators, Cox realized he faced a difficult fight to win confirmation to the bench without a guarantee of success. He withdrew his name.

In announcing his resignation on Wednesday, Donaldson cited family reasons and denied he was stepping down because of disagreements with Republicans over commission decisions. He had sided with the two Democrats on the five-member panel on rules in such areas as stock market trading, hedge funds and mutual funds.

Donaldson, just shy of his 74th birthday, said he hoped "there will be no legalistic rollback of any of these key items." He predicted the next chairman "will leave politics at the door."

In a letter to Mr. Bush, Donaldson cited the tireless work of SEC employees and said the past 2½ years "may well be remembered as the most consequential and productive period in the commission's history."

Mr. Bush turned to Donaldson, a Republican and family friend, in 2003 to replace the embattled Harvey Pitt, whom administration officials forced out after a series of political missteps.

Donaldson helped implement the Sarbanes-Oxley Act. He also won approval at the SEC for a number of rules designed to clean up the $7 trillion mutual fund industry.

Donaldson last month won SEC approval for a plan to overhaul stock trading. He joined with the Democrats on the commission as the two Republican commissioners objected to the new rules.

Under the proposal, known as the "trade-through" rule, stock brokers will be required to accept the best quoted price for any transaction, no matter which market it came from.

The rule is not due to take effect until 2006, leaving the agency free to review it under a new chairman.

In addition to Donaldson, the White House likely will have two additional vacancies to fill on the commission.

The term of one Democratic commissioner, Roel A. Campos, expires this year. Democrat Harvey Goldschmid has made it known that he intends to return to teaching at Columbia University this fall.

By law, no party may control more than three seats on the five-member panel.

Senate Democrats have suggested that the president nominate the SEC's market director, Annette Nazareth, to fill Goldschmid's slot.