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Charles Christopher Cox (born October 16, 1952) is an American attorney and politician who served as chair of the
U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
, a 17-year
Republican Republican can refer to: Political ideology * An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law. ** Republicanism, the ideology in support of republics or agains ...
member of the
United States House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the Lower house, lower chamber of the United States Congress, with the United States Senate, Senate being ...
, and member of the
White House The White House is the official residence and workplace of the president of the United States. It is located at 1600 Pennsylvania Avenue NW in Washington, D.C., and has been the residence of every U.S. president since John Adams in 1800. ...
staff in the
Reagan Administration Ronald Reagan's tenure as the 40th president of the United States began with his first inauguration on January 20, 1981, and ended on January 20, 1989. Reagan, a Republican from California, took office following a landslide victory over D ...
. Prior to his Washington service he was a practicing attorney, teacher, and entrepreneur. Following his retirement from government in 2009, he returned to law practice and currently serves as a director, trustee, and advisor to several for-profit and nonprofit organizations.


Early life and education

Cox was born in St. Paul, Minnesota. After graduating from
Saint Thomas Academy Saint Thomas Academy (abbr. STA), originally known as St. Thomas Aquinas Seminary and formerly known as St. Thomas Military Academy, is the only all-male, Catholic, college-preparatory, military high school in Minnesota. It is located in Mendota ...
in
Mendota Heights, Minnesota Mendota Heights is a city in Dakota County, Minnesota, United States. It is a first ring southern suburb of the Twin Cities. The population was 11,744 at the 2020 census. Geography According to the United States Census Bureau, the city has a to ...
in 1970, Cox earned a Bachelor of Arts degree the
University of Southern California The University of Southern California (USC, SC, or Southern Cal) is a Private university, private research university in Los Angeles, California, United States. Founded in 1880 by Robert M. Widney, it is the oldest private research university in C ...
in 1973, following an accelerated three-year course. He was also a member of
Delta Tau Delta Delta Tau Delta () is a United States-based international Greek letter college fraternity. Delta Tau Delta was founded at Bethany College, Bethany, Virginia, (now West Virginia) in 1858. The fraternity currently has around 130 collegiate chapters ...
fraternity. In 1977, he earned both an
M.B.A. A Master of Business Administration (MBA; also Master's in Business Administration) is a postgraduate degree focused on business administration. The core courses in an MBA program cover various areas of business administration such as account ...
from
Harvard Business School Harvard Business School (HBS) is the graduate business school of Harvard University, a private research university in Boston, Massachusetts. It is consistently ranked among the top business schools in the world and offers a large full-time MBA p ...
and a J.D. from
Harvard Law School Harvard Law School (Harvard Law or HLS) is the law school of Harvard University, a private research university in Cambridge, Massachusetts. Founded in 1817, it is the oldest continuously operating law school in the United States. Each class ...
, where he was an editor of the ''
Harvard Law Review The ''Harvard Law Review'' is a law review published by an independent student group at Harvard Law School. According to the ''Journal Citation Reports'', the ''Harvard Law Review''s 2015 impact factor of 4.979 placed the journal first out of 143 ...
''.


Career

From 1977 to 1978, he served as law clerk to Judge
Herbert Choy Herbert Young Cho Choy (January 6, 1916 – March 10, 2004) was the first Asian American to serve as a United States federal judge and the first person of Korean ancestry to be admitted to the bar in the United States. He served as a United State ...
of the U.S. Court of Appeals for the Ninth Circuit. In October 1978, Cox was paralyzed from the waist down following a serious off-road Jeep accident in the rainforest on the Hawaiian island of
Molokai Molokai , or Molokai (), is the fifth most populated of the eight major islands that make up the Hawaiian Islands, Hawaiian Islands archipelago in the middle of the Pacific Ocean. It is 38 by 10 miles (61 by 16 km) at its greatest length an ...
. He eventually regained the ability to walk but wore a harness of steel bars and leather straps for six months. He still has two metal screws in his back, and according to a 2005 ''
Fortune Fortune may refer to: General * Fortuna or Fortune, the Roman goddess of luck * Luck * Wealth * Fortune, a prediction made in fortune-telling * Fortune, in a fortune cookie Arts and entertainment Film and television * ''The Fortune'' (1931 film) ...
'' magazine profile, “has been in pain every day for the past 27 years.” Since he can't sit for extended periods of time, he has a special desk that allows him to work while standing. As a contestant on the
NBC-TV The National Broadcasting Company (NBC) is an American English-language commercial broadcast television and radio network. The flagship property of the NBC Entertainment division of NBCUniversal, a division of Comcast, its headquarters are l ...
game show ''Password Plus'', Cox won more than $5,000 over multiple appearances. According to a re-broadcast of ''Password Plus'' on the cable network GSN, Cox appeared in 1980 and won $5,400 cash. From 1977 to 1986, Cox was first an associate and then partner with the international law firm of
Latham & Watkins Latham & Watkins LLP is an American multinational law firm. Founded in 1934 in Los Angeles, California, Latham is the second-largest law firm in the world by revenue. As of 2021, Latham is also one of the most profitable law firms in the world ...
. At the time of his retirement in 1986 he was the Partner in Charge of the Corporate Department in the
Orange County Orange County most commonly refers to: *Orange County, California, part of the Los Angeles metropolitan area Orange County may also refer to: U.S. counties *Orange County, Florida, containing Orlando *Orange County, Indiana *Orange County, New ...
office, and served as a member of the firm's national management. In 1982–83, Cox took a leave of absence from
Latham & Watkins Latham & Watkins LLP is an American multinational law firm. Founded in 1934 in Los Angeles, California, Latham is the second-largest law firm in the world by revenue. As of 2021, Latham is also one of the most profitable law firms in the world ...
to teach federal income tax at
Harvard Business School Harvard Business School (HBS) is the graduate business school of Harvard University, a private research university in Boston, Massachusetts. It is consistently ranked among the top business schools in the world and offers a large full-time MBA p ...
. In 1984, Cox co-founded Context Corporation, which produced daily English reproductions of the leading Soviet state-controlled newspaper, ''
Pravda ''Pravda'' ( rus, Правда, p=ˈpravdə, a=Ru-правда.ogg, "Truth") is a Russian broadsheet newspaper, and was the official newspaper of the Communist Party of the Soviet Union, when it was one of the most influential papers in the co ...
''. The publication was used chiefly by U.S. universities and U.S. government agencies, and was eventually distributed to customers in 26 countries around the world. The company had no connection to the Soviet government.


White House

During the second term of
Ronald Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
from 1986 to 1988, Cox served as senior associate counsel to the president. His duties included advising on the nomination of three
Supreme Court justices The Supreme Court of the United States is the highest-ranking judicial body in the United States. Its membership, as set by the Judiciary Act of 1869, consists of the chief justice of the United States and eight associate justices, any six of ...
, the establishment of the Brady Commission following the 1987 market crash, and the drafting of legislative reform proposals for the federal budget process. In 1986, following Chief Justice Warren Burger's confidential message to President Reagan that he planned to step down from the bench, White House Counsel Peter Wallison tasked a small team including Cox with thoroughly researching the opinions and judicial philosophies of the leading candidates for the next Supreme Court nomination. The effort focused on judges of the
U.S. Court of Appeals The United States courts of appeals are the intermediate appellate courts of the United States federal judiciary. The courts of appeals are divided into 11 numbered circuits that cover geographic areas of the United States and hear appeals fr ...
who had a substantial record of decisions. After narrowing the field to five or six, the search quickly settled on Judge
Antonin Scalia Antonin Gregory Scalia (; March 11, 1936 – February 13, 2016) was an American jurist who served as an associate justice of the Supreme Court of the United States from 1986 until his death in 2016. He was described as the intellectu ...
of the
U.S. Court of Appeals for the D.C. Circuit The United States Court of Appeals for the District of Columbia Circuit (in case citations, D.C. Cir.) is one of the thirteen United States Courts of Appeals. It has the smallest geographical jurisdiction of any of the U.S. federal appellate cou ...
, a recommendation the president accepted. As a part of his White House responsibilities, Cox also reviewed the
FBI The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and its principal Federal law enforcement in the United States, federal law enforcement age ...
files of nominees for presidential appointments.Cox Files in Reagan Library When
Howard Baker Howard Henry Baker Jr. (November 15, 1925 June 26, 2014) was an American politician and diplomat who served as a United States Senator from Tennessee from 1967 to 1985. During his tenure, he rose to the rank of Senate Minority Leader and then ...
took over for
Donald Regan Donald Thomas Regan (December 21, 1918 – June 10, 2003) was the 66th United States Secretary of the Treasury from 1981 to 1985 and the White House Chief of Staff from 1985 to 1987 under Ronald Reagan. In the Reagan administration, he advocat ...
as
chief of staff The title chief of staff (or head of staff) identifies the leader of a complex organization such as the armed forces, institution, or body of persons and it also may identify a principal staff officer (PSO), who is the coordinator of the supporti ...
in 1987, bringing with him
Arthur B. Culvahouse Jr. Arthur Boggess Culvahouse Jr. (born July 4, 1948) is an American attorney who served as the United States Ambassador to Australia from 2019 to 2021. He is the former Chair of O'Melveny & Myers, an international law firm of more than 1,000 lawyer ...
as counsel to the president,
First Lady First lady is an unofficial title usually used for the wife, and occasionally used for the daughter or other female relative, of a non-monarchical A monarchy is a form of government in which a person, the monarch, is head of state fo ...
Nancy Reagan Nancy Davis Reagan (; born Anne Frances Robbins; July 6, 1921 – March 6, 2016) was an American film actress and First Lady of the United States from 1981 to 1989. She was the second wife of president Ronald Reagan. Reagan was born in N ...
specifically asked Culvahouse to keep Cox on the White House staff. According to Culvahouse, she and the East Wing staff "liked Chris a lot ... He is a very good lawyer," and his willingness to give up his partnership in a prestigious law firm to join the White House staff only a year before had made an impression. As senior associate counsel under Culvahouse, Cox became deeply involved in market issues and securities issues including then-pending congressional proposals for legislation on
insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...
,
greenmail Greenmail or greenmailing is the action of purchasing enough shares in a firm to challenge a firm's leadership with the threat of a hostile takeover to force the target company to buy the purchased shares back at a premium in order to prevent the ...
,
junk bonds In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events ...
,
golden parachute A golden parachute is an agreement between a company and an employee (usually an upper executive) specifying that the employee will receive certain significant benefits if employment is terminated. These may include severance pay, cash bonuses, s ...
s and
golden handcuffs Golden handcuffs, a phrase first recorded in 1976, refers to financial allurements and benefits that have the objective to encourage highly compensated employees to remain within a company or organization instead of moving from company to company ...
,
tender offer In corporate finance, a tender offer is a type of public takeover bid. The tender offer is a public, open offer or invitation (usually announced in a newspaper advertisement) by a prospective acquirer to all stockholders of a publicly traded corpo ...
s, and
takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to t ...
s. His work on the White House response to the 1987 stock market crash included the formation of the Presidential Task Force on Market Mechanisms and the recruitment of
Harvard Business School Harvard Business School (HBS) is the graduate business school of Harvard University, a private research university in Boston, Massachusetts. It is consistently ranked among the top business schools in the world and offers a large full-time MBA p ...
professor Robert Glauber, who had been Cox's department chairman during his stint on the faculty there, as its executive director. The Commission provided the definitive autopsy on what happened to the markets on
Black Monday Black Monday refers to specific Mondays when undesirable or turbulent events have occurred. It has been used to designate massacres, military battles, and stock market crashes. Historic events *1209, Dublin – when a group of 500 recently arriv ...
, October 19, 1987, and its aftermath. Coincidentally, eight months prior to the crash, Chief of Staff
Howard Baker Howard Henry Baker Jr. (November 15, 1925 June 26, 2014) was an American politician and diplomat who served as a United States Senator from Tennessee from 1967 to 1985. During his tenure, he rose to the rank of Senate Minority Leader and then ...
had asked Cox to write a detailed memo describing the emergency powers that the President might exercise in a market crisis. That landed Cox in an emergency meeting in the chief of staff’s office on Black Monday, from which Baker called then-NYSE Chairman John Phelan to urge him to drop his plan to shut down the New York Stock Exchange. At the time, some conservatives were pushing for a constitutional convention to advance a
balanced budget amendment A balanced budget amendment is a constitutional rule requiring that a state cannot spend more than its income. It requires a balance between the projected receipts and expenditures of the government. Balanced-budget provisions have been added t ...
, and Cox conducted research on the question. He represented the White House at hearings on the advisability of releasing
John Hinckley John Warnock Hinckley Jr. (born May 29, 1955) is an American man who attempted to assassinate U.S. President Ronald Reagan in Washington, D.C. on March 30, 1981, two months after Reagan's first inauguration. Using a .22 caliber revolver, Hinck ...
from
St. Elizabeth's Hospital St. Elizabeths Hospital is a psychiatric hospital in Southeast, Washington, D.C. operated by the District of Columbia Department of Behavioral Health. It opened in 1855 under the name Government Hospital for the Insane, the first federally oper ...
following Hinckley's attempted assassination of President Reagan, and led the vetting and research effort that resulted in
Northwestern Law School Northwestern University Pritzker School of Law is the law school of Northwestern University, a private research university. It is located on the university's Chicago campus. Northwestern Law has been ranked among the top 14, or "T14" law sch ...
Dean
David Ruder David Sturtevant Ruder (May 25, 1929 – February 15, 2020) was the William W. Gurley Memorial Professor of Law Emeritus at Northwestern University School of Law, where he served on the faculty since 1961, and where he served as dean from 1977 to ...
being recommended to the president as SEC Chairman in 1987. A former soccer player at
USC USC most often refers to: * University of South Carolina, a public research university ** University of South Carolina System, the main university and its satellite campuses **South Carolina Gamecocks, the school athletic program * University of ...
, as a White House counsel Cox worked with the
United States Soccer Federation The United States Soccer Federation (USSF), commonly referred to as U.S. Soccer, is a 501(c)(3) nonprofit organization and the official governing body of the sport of soccer in the United States. Headquartered in Chicago, the federation is ...
on its proposal to bring the
World Cup A world cup is a global sporting competition in which the participant entities – usually international teams or individuals representing their countries – compete for the title of world champion. The event most associated with the concept i ...
to the United States in 1994. “He was a key. Everybody in the damned government had their fingers in this,” said Eddie Mahe, who ran the U.S. Soccer Federation’s 1986 campaign to bring the event to the United States. “Without him, I don’t know that it would have survived.” According to the ''
Los Angeles Times The ''Los Angeles Times'' (abbreviated as ''LA Times'') is a daily newspaper that started publishing in Los Angeles in 1881. Based in the LA-adjacent suburb of El Segundo since 2018, it is the sixth-largest newspaper by circulation in the Un ...
'', soccer's governing body was requiring waivers of federal laws and regulations from virtually every agency of the federal government, and in "record time, Cox prepared an executive order directing the agencies to fall in line. Reagan signed it." On July 5, 1988, the U.S. won the selection bid. In appreciation, the U.S. team presented Cox with the first jersey to be signed by all 22 members.


U.S. House of Representatives

Cox was elected to Congress in 1988 from what was then
California's 40th congressional district California's 40th congressional district is a congressional district in the U.S. state of California. The district is currently represented by . The district includes Downey, East Los Angeles, Commerce, Paramount, Bell, Bell Gardens, Bellfl ...
. He was re-elected eight more times from this
Orange County Orange County most commonly refers to: *Orange County, California, part of the Los Angeles metropolitan area Orange County may also refer to: U.S. counties *Orange County, Florida, containing Orlando *Orange County, Indiana *Orange County, New ...
-based district, which was renumbered as the 47th District in 1993 and the 48th District in 2003. Early in his congressional career, Cox befriended two anti-Communists in Hungary and
Lithuania Lithuania (; lt, Lietuva ), officially the Republic of Lithuania ( lt, Lietuvos Respublika, links=no ), is a country in the Baltic region of Europe. It is one of three Baltic states and lies on the eastern shore of the Baltic Sea. Lithuania ...
who had been prisoners of conscience and who later became presidents of their countries after the end of
Soviet The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, ...
domination. Cox met
Árpád Göncz Árpád Göncz (; 10 February 1922 – 6 October 2015) was a Hungarian writer, translator, agronomist, and liberal politician who served as President of Hungary from 2 May 1990 to 4 August 2000. Göncz played a role in the Hungarian Revolution ...
in 1989, and when Cox was later married, he spent part of his honeymoon in Hungary with then- President Göncz and his wife Mária Zsuzsanna Göntér. Cox met Dr.
Vytautas Landsbergis Vytautas Landsbergis (born 18 October 1932) is a Lithuanian politician and former Member of the European Parliament. He was the first Speaker of Reconstituent Seimas of Lithuania after its independence declaration from the Soviet Union. He has ...
, a professor at the Conservatory of Music in
Vilnius Vilnius ( , ; see also other names) is the capital and largest city of Lithuania, with a population of 592,389 (according to the state register) or 625,107 (according to the municipality of Vilnius). The population of Vilnius's functional urb ...
, in 1989, well before the successful reestablishment of Lithuanian independence. The night Landsbergis was elected President of
Lithuania Lithuania (; lt, Lietuva ), officially the Republic of Lithuania ( lt, Lietuvos Respublika, links=no ), is a country in the Baltic region of Europe. It is one of three Baltic states and lies on the eastern shore of the Baltic Sea. Lithuania ...
, he embraced Cox on the tarmac at the airport in
Vilnius Vilnius ( , ; see also other names) is the capital and largest city of Lithuania, with a population of 592,389 (according to the state register) or 625,107 (according to the municipality of Vilnius). The population of Vilnius's functional urb ...
after the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
had held Cox in
East Berlin East Berlin was the ''de facto'' capital city of East Germany from 1949 to 1990. Formally, it was the Allied occupation zones in Germany, Soviet sector of Berlin, established in 1945. The American, British, and French sectors were known as ...
for a prolonged period. In May 1998, Cox was presented with the
Order of the Lithuanian Grand Duke Gediminas The Order of the Lithuanian Grand Duke Gediminas is the Lithuanian Presidential Award which was re-instituted to honour the citizens of Lithuania for outstanding performance in civil and public offices. Foreign nationals may also be awarded this O ...
, the highest honor the Republic of Lithuania can give to a living noncitizen. In 1989, Polish President
Lech Wałęsa Lech Wałęsa (; ; born 29 September 1943) is a Polish statesman, dissident, and Nobel Peace Prize laureate, who served as the President of Poland between 1990 and 1995. After winning the 1990 election, Wałęsa became the first democratica ...
joined Cox in a
Washington, DC ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan ...
ceremony marking the enactment of Cox's legislation establishing the Polish-American Enterprise Fund. Together with the Baltic-American Enterprise Fund, the Hungarian-American Enterprise Fund, and seven other enterprise funds in Central and Eastern Europe and the former
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
, the Cox legislation, incorporated in the Support Eastern European Democracy (SEED) Act, matched U.S. foreign aid with venture capital in the newly free countries of the former
Warsaw Pact The Warsaw Pact (WP) or Treaty of Warsaw, formally the Treaty of Friendship, Cooperation and Mutual Assistance, was a collective defense treaty signed in Warsaw, Poland, between the Soviet Union and seven other Eastern Bloc socialist republic ...
. Cox has some fluency in the Russian language. In 1994, Cox was appointed by President Clinton to the Bipartisan Commission on Entitlement and Tax Reform, which in 1995 published a unanimous report warning that the nation cannot continue to allow
entitlement programs Social programs in the United States are programs designed to ensure that the basic needs of the American population are met. Federal and state social programs include cash assistance, health insurance, food assistance, housing subsidies, en ...
to consume a rapidly increasing share of the federal budget. Among Cox's notable legislative successes as a Representative was the Internet Tax Freedom Act, a 1998 law prohibiting federal, state, and local government taxation of Internet access and banning Internet-only levies such as email taxes, bit taxes, and bandwidth taxes. With U.S. Rep.
Barney Frank Barnett Frank (born March 31, 1940) is a former American politician. He served as a member of the U.S. House of Representatives from Massachusetts from 1981 to 2013. A Democrat, Frank served as chairman of the House Financial Services Committee ...
(D-MA) as his chief co-sponsor, Cox authored legislation in 1997 to privatize the
National Helium Reserve The National Helium Reserve, also known as the Federal Helium Reserve, is a strategic reserve of the United States holding over 1 billion cubic meters (109 m3) of helium gas. The helium is stored at the Cliffside Storage Facility about northwes ...
, which was then $1.4 billion in debt to taxpayers. As of 2004, this was the third-largest
privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
in U.S. history, surpassing the value of the 1988
Conrail Conrail , formally the Consolidated Rail Corporation, was the primary Class I railroad in the Northeastern United States between 1976 and 1999. The trade name Conrail is a portmanteau based on the company's legal name. It continues to do busin ...
privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
. Cox also wrote the only law that was enacted over President
Bill Clinton William Jefferson Clinton ( né Blythe III; born August 19, 1946) is an American politician who served as the 42nd president of the United States from 1993 to 2001. He previously served as governor of Arkansas from 1979 to 1981 and agai ...
's veto, the
Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995, , 109 Stat. 737 (codified as amended in scattered sections of 15 U.S.C.) ("PSLRA") implemented several substantive changes in the United States that have affected certain cases brought under the ...
of 1995, aimed at protecting investors from fraudulent and extortionate lawsuits. For 10 of his 17 years in the Congress, from 1995 to 2005, Cox served in the House Majority Leadership as Chairman of the House Republican Policy Committee, the fifth-ranking elected leadership position (behind the
Speaker Speaker may refer to: Society and politics * Speaker (politics), the presiding officer in a legislative assembly * Public speaker, one who gives a speech or lecture * A person producing speech: the producer of a given utterance, especially: ** I ...
, the
Majority Leader In U.S. politics (as well as in some other countries utilizing the presidential system), the majority floor leader is a partisan position in a legislative body.
, the
Majority Whip A whip is an official of a political party whose task is to ensure party discipline in a legislature. This means ensuring that members of the party vote according to the party platform, rather than according to their own individual ideology ...
, and the Chair of the
House Republican Conference The House Republican Conference is the party caucus for Republicans in the United States House of Representatives. It hosts meetings and is the primary forum for communicating the party's message to members. The Conference produces a daily pub ...
). He was Chairman of the
House Committee on Homeland Security The U.S. House Committee on Homeland Security is a standing committee of the United States House of Representatives. Its responsibilities include U.S. security legislation and oversight of the Department of Homeland Security. Role of the commit ...
, and also Chairman of the Select Committee on U.S. National Security that produced the
Cox Report The Report of the Select Committee on U.S. National Security and Military/Commercial Concerns with the People's Republic of China, commonly known as the Cox Report after Representative Christopher Cox, is a classified U.S. government docum ...
, an indictment of Chinese espionage and of security failures at several U.S. national laboratories. When Congress established the Bipartisan Study Group on Enhancing Multilateral Export Controls through federal legislation in 1999, Cox was tapped as co-chairman. The group published a unanimous report in 2001 recommending wholesale modernization of U.S. export controls. Cox also served as Chairman of the Select Committee on Homeland Security (the predecessor to the permanent House Committee); Chairman of the Task Force on Capital Markets; and Chairman of the Task Force on Budget Process Reform. In the spring of 2001, then-Representative Cox was considered by President
George W. Bush George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, he ...
for a federal appellate judgeship on the U.S. Court of Appeals for the Ninth Circuit. Cox withdrew his name from consideration before a nomination could be made because one of his home state Democratic Senators,
Barbara Boxer Barbara Sue Boxer (née Levy; born November 11, 1940) is an American politician and lobbyist who served in the United States Senate, representing California from 1993 to 2017. A member of the Democratic Party, she previously served as the U.S. ...
, objected to him due to his perceived conservatism. The seat that Cox had been considered for was eventually filled by Bush nominee
Carlos Bea Carlos Tiburcio Bea (born April 18, 1934) is a Senior United States circuit judge of the United States Court of Appeals for the Ninth Circuit. He was appointed to that court by President George W. Bush in 2003 to replace Judge Charles Edward Wi ...
.


U.S. Securities and Exchange Commission

Cox was nominated by President
George W. Bush George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, he ...
to be the 28th chairman of the
United States Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
(SEC) on June 2, 2005 and unanimously confirmed by the
United States Senate The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and pow ...
on July 29, 2005. He was sworn in on August 3, 2005. Shortly after becoming SEC Chairman, he was diagnosed with thymoma, a rare form of cancer, and underwent surgery in January 2006 to remove a tumor from his chest. He returned to work "after several weeks recovering from surgery," according to The
Associated Press The Associated Press (AP) is an American non-profit news agency headquartered in New York City. Founded in 1846, it operates as a cooperative, unincorporated association. It produces news reports that are distributed to its members, U.S. newspa ...
. (The cancer returned 10 years later, but Cox was again given a clean bill of health after surgery and treatment.) In May 2008, Cox delivered the Commencement Address at
Northeastern University Northeastern University (NU) is a private university, private research university with its main campus in Boston. Established in 1898, the university offers undergraduate and graduate programs on its main campus as well as satellite campuses in ...
in
Boston Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...
,
Massachusetts Massachusetts (Massachusett language, Massachusett: ''Muhsachuweesut assachusett writing systems, məhswatʃəwiːsət'' English: , ), officially the Commonwealth of Massachusetts, is the most populous U.S. state, state in the New England ...
. In April 2008, he received the
University of Southern California The University of Southern California (USC, SC, or Southern Cal) is a Private university, private research university in Los Angeles, California, United States. Founded in 1880 by Robert M. Widney, it is the oldest private research university in C ...
's highest award, the Asa V. Call Achievement Award, in a ceremony at the Los Angeles
Millennium Biltmore Hotel The Millennium Biltmore Hotel, originally the Los Angeles Biltmore of the Bowman-Biltmore Hotels group, is a luxury hotel located opposite Pershing Square in Downtown Los Angeles, California. Upon its grand opening in 1923, the Los Angeles Biltmor ...
. The
Housing and Economic Recovery Act of 2008 The United States Housing and Economic Recovery Act of 2008 () (commonly referred to as HERA) was designed primarily to address the subprime mortgage crisis. It authorized the Federal Housing Administration to guarantee up to $300 billion in new ...
, enacted in July 2008, gave Cox one of five seats on the Federal Housing Finance Oversight Board, which advises the Director of the
Federal Housing Finance Agency The Federal Housing Finance Agency (FHFA) is an independent federal agency in the United States created as the successor regulatory agency of the Federal Housing Finance Board (FHFB), the Office of Federal Housing Enterprise Oversight (OFHEO), an ...
with respect to overall strategies and policies regarding the safety and soundness of
Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...
,
Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is a publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons Corner, Virginia.Federal Home Loan Banks The Federal Home Loan Banks (FHLBanks, or FHLBank System) are 11 U.S. government-sponsored banks that provide liquidity to the members of financial institutions to support housing finance and community investment. Overview The FHLBank System was ...
. In September 2008, the
U.S. Congress The United States Congress is the legislature of the federal government of the United States. It is Bicameralism, bicameral, composed of a lower body, the United States House of Representatives, House of Representatives, and an upper body, ...
passed and President Bush signed the
Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008, often called the "bank bailout of 2008", was proposed by Treasury Secretary Henry Paulson, passed by the 110th United States Congress, and signed into law by President George W. Bush. It became ...
, which placed Cox on the newly established Financial Stability Oversight Board to oversee the $700 billion
Troubled Assets Relief Program The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase toxic assets and equity from financial institutions to strengthen its financial sector that was passed by Congress and signed into law by President ...
.


Regulatory initiatives

During his tenure, Cox led the Commission to implement new executive compensation rules. Since the early 1990s, support for reform had been growing, urged by the U.S.
Financial Accounting Standards Board The Financial Accounting Standards Board (FASB) is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securi ...
and others. Relying in part on FASB's recommendations for improved presentation of compensation information, the Cox reforms made it possible for users of financial statements to readily understand how public company executives are compensated. Newly required information included the lump-sum cost of retirement benefits and explanations of why specific stock option grants were approved. ''
The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' observed that the Commission "largely stood its ground amid pressure from compensation specialists, investor advocates, and industry groups." With more than 20,000 comment letters, Cox said, "No issue in the history of the SEC has generated such interest." One of his first initiatives was launching a plain English effort, to eliminate legalese in investor communications in favor of clear language that let investors focus on what was important, the better to hold a company's performance up to the light of day. Not only the executive compensation rules, but also disclosure rules for investment advisors and mutual funds—where more than half of U.S. households had their retirement and college savings—were subjected to the plain English requirements. Under Cox the SEC wrote new rules requiring the $10.6 trillion mutual fund industry to make their prospectuses easier for investors to read, understand, and access. Cox defended the 2002
Sarbanes–Oxley Act The Sarbanes–Oxley Act of 2002 is a United States federal law that mandates certain practices in financial record keeping and reporting for corporations. The act, (), also known as the "Public Company Accounting Reform and Investor Protecti ...
and resisted efforts to repeal it or scale it back legislatively. The greatest source of complaint about the law during his tenure was its Section 404, which produced compliance expenses far higher than the SEC under his predecessor had predicted. Working with the
Public Company Accounting Oversight Board The Public Company Accounting Oversight Board (PCAOB) is a nonprofit corporation created by the Sarbanes–Oxley Act of 2002 to oversee the audits of public companies and other issuers in order to protect the interests of investors and further t ...
, the SEC under Cox replaced the original auditing standard for Section 404 with a streamlined, more cost-effective version, and also provided new guidance for management intended to reduce unnecessary costs. At Cox's direction the agency undertook a nationwide Small Business Cost-Benefit Study to determine whether, as intended, the new auditing standard and management guidance had made compliance less expensive and better focused the 404 process on control elements that truly matter for companies of all sizes. In June 2007 the Commission voted unanimously to repeal the so-called "
uptick rule The uptick rule is a trading restriction that states that short selling a stock is allowed only on an uptick. For the rule to be satisfied, the short must be either at a price above the last traded price of the security, or at the last traded pric ...
" or "tick test." The action was not controversial at the time: it was taken after an extensive multi-year study by the Office of Economic Analysis, begun in 2003 under Chairman Bill Donaldson. The study found that the rule—which had never applied on
NASDAQ The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
or to ECNs and other trading systems—had been rendered ineffective on the
NYSE The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is by far the List of stock exchanges, world's largest s ...
due to
decimalization Decimalisation or decimalization (see spelling differences) is the conversion of a system of currency or of weights and measures to units related by powers of 10. Most countries have decimalised their currencies, converting them from non-decimal ...
(that is, the reduction of the "tick" increment to a penny, as compared to the 1/8 or 12½¢ that was in effect when the rule was adopted in 1938). Its repeal later became the subject of much debate, with some advocating its reinstatement. On July 15, 2008, Cox told a
U.S. House The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...
hearing that the Commission was studying the potential institution of "a price test that could work with an increment of a nickel or dime" or some more meaningful amount.


Technological modernization

Technological modernization of the SEC was a Cox priority throughout his tenure. He introduced new technology for investor disclosure, compliance analytics, nationwide investigative work sharing, and management of funds recovered for investors. In August 2008 he rolled out the future replacement of the SEC's forms-based disclosure database, called
EDGAR Edgar is a commonly used English given name, from an Anglo-Saxon name ''Eadgar'' (composed of '' ead'' "rich, prosperous" and ''gar'' "spear"). Like most Anglo-Saxon names, it fell out of use by the later medieval period; it was, however, rev ...
, with a new interactive disclosure system using computer-tagged data in the
eXtensible Business Reporting Language XBRL (eXtensible Business Reporting Language) is a freely available and global framework for exchanging business information. XBRL allows the expression of Semantics#Computer science, semantic meaning commonly required in business reporting. Th ...
(
XBRL XBRL (eXtensible Business Reporting Language) is a freely available and global framework for exchanging business information. XBRL allows the expression of semantic meaning commonly required in business reporting. The language is XML-based an ...
). The new system was designed to let future investors easily search, sort, and recombine information to generate reports and analysis from hundreds of thousands of companies and millions of forms. Under Cox the SEC oversaw the creation of a taxonomy of over 11,000 XBRL data tags that catalog every element of
U.S. Generally Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP or U.S. GAAP, pronounced like "gap") is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC) and is the default accounting standard used by companies based in the Unit ...
. In 2008 the Commission issued rules requiring all publicly traded companies and mutual funds in the United States to tag their financial information. Another Cox technology initiative liberalized the proxy rules to allow investors and companies to use Electronic Shareholder Forums—virtual meeting places on the Internet to promote shareholder initiatives, conduct straw polls, apprise a company's directors of critical shareholder concerns, and inform shareholders of management's and directors' views. In 2006 the SEC launched a war against Internet financial
spam Spam may refer to: * Spam (food), a canned pork meat product * Spamming, unsolicited or undesired electronic messages ** Email spam, unsolicited, undesired, or illegal email messages ** Messaging spam, spam targeting users of instant messaging ( ...
, shutting down trading in companies that touted their stock by clogging investors’ in-boxes. Investor complaints about the practice fell from more than 220,000 per month in December 2006 to 70,000 per month in February 2007; Internet software and services company Symantec credited the SEC with cutting financial spam by 30 percent. These technological initiatives were widely supported, with one observer noting that Cox "earned virtually universal plaudits for efforts to modernize technology, transparency, and understandability of corporate reports, and to provide for apples-to-apples comparisons (for the first time ever) of corporate executive compensation."


Individual investors and seniors

The particular needs of senior investors, whose ranks are growing rapidly, was a special Cox focus. In April 2006, the SEC held its first “Seniors Summit”, working with
AARP AARP (formerly called the American Association of Retired Persons) is an interest group in the United States focusing on issues affecting those over the age of fifty. The organization said it had more than 38 million members in 2018. The magazin ...
, the
Financial Industry Regulatory Authority The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...
, the
North American Securities Administrators Association The North American Securities Administrators Association (NASAA), founded in Kansas in 1919, is the oldest international investor protection organization. NASAA is an association of state securities administrators who are charged with the responsi ...
, and several state regulators; the conferences are now held annually. A nationwide sweep examination conducted by the SEC and authorities in seven states found that "free lunch" investment seminars, which draw large numbers of retirees, routinely involved significant
fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...
. Many were advised to put their retirement funds into equity-indexed annuities, where they could get stock market returns while keeping their money “safe”. But neither these investments, nor the sales agents, were registered with state or federal securities regulators—and investors were frequently unaware that it would be impossible to get their money back for as much as 15 years without paying a stiff penalty. The SEC enacted rules in 2008 to protect seniors and other investors from fraudulent and abusive practices in annuities sales.


International integration

During Cox's tenure the SEC significantly expanded its international activity. Between 2005 and 2008, Cox signed supervisory arrangements covering enforcement and regulatory cooperation with regulators in the United Kingdom, France, the Netherlands, Belgium, Portugal, Australia, Germany, Bulgaria, and Norway. As Chairman of the
International Organization of Securities Commissions The International Organization of Securities Commissions (IOSCO) is an association of organizations that regulate the world's securities and futures markets. Members are typically primary securities and/or futures regulators in a national jurisdic ...
' Technical Committee, he led international efforts to converge
U.S. GAAP Generally Accepted Accounting Principles (GAAP or U.S. GAAP, pronounced like "gap") is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC) and is the default accounting standard used by companies based in the Uni ...
and
International Financial Reporting Standards International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's f ...
. In December 2007, the SEC adopted rules to permit foreign issuers to use
IFRS International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's fina ...
without reconciliation to
U.S. GAAP Generally Accepted Accounting Principles (GAAP or U.S. GAAP, pronounced like "gap") is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC) and is the default accounting standard used by companies based in the Uni ...
. And in November 2008, the SEC issued a roadmap – with clear milestones along the way — that would lead to a Commission decision as early as 2014 on whether or not U.S. public companies should be required to use
IFRS International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's fina ...
. Cox also initiated a mutual recognition process for foreign regulators, based on an assessment of whether the securities regulatory system in another country produces comparably high-quality results for investors, including in the area of enforcement. In August 2008 he executed an arrangement with the
Australian Securities and Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...
under which the SEC could approve exemptions allowing Australian-registered securities exchanges to operate in the U.S. without having also to register with the SEC, and U.S. exchanges would have the same privilege in Australia. As of 2008, the SEC was in mutual recognition discussions with regulators in Canada, and also in preliminary discussions with the Committee of European Securities Regulators.


Law enforcement

International enforcement also stepped up considerably under Cox. In 2008, the SEC made 556 requests of foreign regulators for assistance with SEC investigations, many of which were connected to potential wrongdoing in the subprime market. Among the significant international cases the Commission brought during this period were the highly publicized 2008 charges against Hong Kong-based insider trading in
Dow Jones Dow Jones is a combination of the names of business partners Charles Dow and Edward Jones. Dow Jones & Company Dow, Jones and Charles Bergstresser founded Dow Jones & Company in 1882. That company eventually became a subsidiary of News Corp, and ...
prior to its acquisition by
News Corporation News Corporation (abbreviated News Corp.), also variously known as News Corporation Limited, was an American multinational mass media corporation controlled by media mogul Rupert Murdoch and headquartered at 1211 Avenue of the Americas in Ne ...
. Under Cox the SEC also brought the largest number of cases in its history charging corporations and their officers with foreign bribery under the
Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests. The FCPA is applicable world ...
and imposed record penalties for these cases. Overall, enforcement was Cox's stated priority beginning in 2005 and throughout his chairmanship. He moved quickly to settle the debate over whether it was legitimate to impose penalties on corporations, adopting a policy that made clear the SEC "isn't turning out to be the corporate-friendly place that many in the boardroom set were hoping for." Within the SEC budget, as of 2008, he had increased the share devoted to enforcement to its highest level in 20 years. Nonetheless, the SEC's overall appropriation was held steady during two of his budget years, first by a Republican and then a Democratic Congress, and it was increased by only 2% in a third year. These sub-inflation agency budgets, combined with merit pay increases for staff, caused the total enforcement personnel to decline. Critics attacked the underfunding of the SEC and blamed Cox, though Congress and the administration clearly shared the responsibility. When the agency budget was finally increased in fiscal 2008, he increased enforcement personnel by 4%. Beginning early in his chairmanship he focused the agency's enforcement efforts on stock option backdating, an illicit practice that had been exposed after the 2002
Sarbanes–Oxley Act The Sarbanes–Oxley Act of 2002 is a United States federal law that mandates certain practices in financial record keeping and reporting for corporations. The act, (), also known as the "Public Company Accounting Reform and Investor Protecti ...
changed the rules regarding the reporting of
stock option In finance, an option is a contract which conveys to its owner, the ''holder'', the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified dat ...
grants. Under Cox the SEC investigated more than 160 stock option backdating cases, aided by the fact that the reporting forms for
stock option In finance, an option is a contract which conveys to its owner, the ''holder'', the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified dat ...
disclosure were among the first to be mandated in “interactive data” format. Some of these cases were noteworthy for their size: in December 2007 the agency won $468 million in a settlement for stock option backdating against the former Chairman and CEO of
UnitedHealth Group UnitedHealth Group Incorporated is an American multinational managed healthcare and insurance company based in Minnetonka, Minnesota. It offers health care products and insurance services. UnitedHealth Group is the world's seventh largest ...
. Cox also aggressively used the agency's “Fair Funds” authority to distribute funds recovered from securities law violators directly to injured investors. By February 2008 the SEC had returned more than $3.5 billion to wronged investors, including more than $2 billion in 2007 alone. To expedite the return of the funds, cut red tape and lower costs, Cox created a new Office of Collections and Distributions. A few weeks later, in May 2008, the new Office began sending more than $800 million in Fair Funds to harmed investors in American International Group, Inc. (AIG), which settled SEC charges of
financial fraud In law, fraud is intent (law), intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid t ...
. In 2006 the Commission obtained a $350 million penalty from
Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...
after accusing it of
accounting fraud Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "language ...
; the penalty was one of the largest in Commission history. The following year the Commission charged
Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is a publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons Corner, Virginia.accounting fraud Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "language ...
and recovered a $50 million penalty. As the 2008
credit crunch A credit crunch (also known as a credit squeeze, credit tightening or credit crisis) is a sudden reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from banks. A credit cr ...
spread to
municipal finance A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, ...
, the auction rate securities market froze, leaving investors without access to their cash. The SEC immediately investigated the largest firms in the market and entered into settlements that were the largest in the history of the SEC, amounting to up to $30 billion to injured investors. Cox also targeted
municipal securities A municipality is usually a single administrative division having corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate. The term ''municipality'' may also mean the g ...
fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...
. In April 2008 the SEC charged five former
San Diego San Diego ( , ; ) is a city on the Pacific Ocean coast of Southern California located immediately adjacent to the Mexico–United States border. With a 2020 population of 1,386,932, it is the List of United States cities by population, eigh ...
city officials with
securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in los ...
involving billions in undisclosed pension liabilities that had placed the city and taxpayers in serious financial jeopardy. Throughout his chairmanship he railed against the inadequacy of disclosure to investors in municipal securities, which the SEC does not regulate, and asked
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of a ...
for explicit authority for the agency to do so. In December 2008, the SEC under his leadership authorized the creation of a free, Internet-accessible repository for municipal finance disclosure. "With liquidity problems of municipal auction rate securities and rating downgrades of municipal bond insurers contributing to the current credit crisis, the disclosure and transparency of the municipal markets have never been more critical," he said. In late December 2008, following the confession by New York
investment advisor A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory ...
Bernard Madoff Bernard Lawrence Madoff ( ; April 29, 1938April 14, 2021) was an American fraudster and financier who was the admitted mastermind of the largest Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the NASDAQ s ...
and the filing of SEC charges against him alleging a $50 billion fraud, Cox stated that he was "gravely concerned" that "specific and credible evidence" provided to the agency over a period of at least 10 years had not previously been referred to the Commission for commencement of a formal investigation. He ordered an internal investigation by the agency's Inspector General. The report found that substantive allegations concerning Madoff were first brought to the SEC in 1992.


Response to the beginning of the 2008 U.S. recession

Under his leadership, the SEC on September 17 and 18, 2008, imposed a variety of both permanent and emergency restrictions on
short selling In finance, being short in an asset means investing in such a way that the investor will profit if the value of the asset falls. This is the opposite of a more conventional "long" position, where the investor will profit if the value of the ...
in response to the liquidity crisis. Abusive
naked short selling Naked short selling, or naked shorting, is the practice of short-selling a tradable asset of any kind without first borrowing the asset from someone else or ensuring that it can be borrowed. When the seller does not obtain the asset and deli ...
, in which the seller intentionally fails to deliver the shares sold short in time for settlement, was banned outright, an exception for options
market maker A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the ''bid–ask spread'', or ''turn.'' The benefit to the firm is that it ...
s that had been in place for several years was eliminated, and a new anti-fraud provision, Rule 10b-21, was adopted to give specific enforcement authority in such cases. In September 2008,
short selling In finance, being short in an asset means investing in such a way that the investor will profit if the value of the asset falls. This is the opposite of a more conventional "long" position, where the investor will profit if the value of the ...
of 799 financial stocks was temporarily curtailed in response to rumors accompanied by heightened short selling activity in the shares of major financial institutions. On September 26, 2008, Cox ended the 2004 program for voluntary regulation of investment bank holding companies, begun under SEC Chairman William Donaldson and then-Director of Market Regulation (later SEC Commissioner) Annette Nazareth. The program "was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily," Cox said. A critical report by the SEC inspector general that evaluated the program in light of the
Bear Stearns The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
near-failure in March 2008 found that while "
Bear Stearns The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
was compliant with the capital and liquidity requirements" at the time of its acquisition, "its collapse raises serious questions about the adequacy of these requirements." However, according to the Inspector General, his report "did not include a determination of the cause of
Bear Stearns The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
' collapse" or determine "whether any of these issues directly contributed to
Bear Stearns The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
' collapse." On that subject, the report stated, "we have no evidence linking these significant deficiencies with the cause of
Bear Stearns The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
' collapse." Cox criticized the oversight program on the ground that because of its voluntary nature and the SEC's limited statutory authority, the agency could not force changes in the hundreds of unregulated subsidiaries of large investment banks such as
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
,
Morgan Stanley Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
,
Merrill Lynch Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment bank ...
,
Lehman Brothers Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before Bankruptcy of Lehman Brothers, filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Gol ...
and
Bear Stearns The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
as bank regulators could do with bank holding companies. In testimony before Congress on several occasions in 2008, he asked for statutory authority to regulate investment bank holding companies. In addition to the fact that the Gramm-Leach-Bliley Act did not give the SEC the authority to regulate large investment bank holding companies, Cox noted that investors were vulnerable to other regulatory gaps such as the fact that the $60 trillion market for
credit default swap A credit default swap (CDS) is a financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default (by the debtor) or other credit event. That is, the seller of the CDS insures the buyer against som ...
s was then completely unregulated. "Neither the SEC nor any regulator has authority even to require minimum disclosure", he said. In testimony and public statements he urged
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of a ...
to enact remedial legislation. Cox said that during the buildup of the
credit crisis A credit crunch (also known as a credit squeeze, credit tightening or credit crisis) is a sudden reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from banks. A credit cr ...
, when the
credit rating agencies A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may ra ...
were still unregulated, they gave top credit ratings to financial instruments which packaged risky loans and spread the negative impacts of the
credit crisis A credit crunch (also known as a credit squeeze, credit tightening or credit crisis) is a sudden reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from banks. A credit cr ...
more broadly throughout the markets. Following the first-time SEC registration of the
credit rating agencies A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may ra ...
in September 2007 under newly enacted legislative authority, he ordered a 10-month examination of the three major
rating agencies A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may ra ...
that uncovered significant weaknesses in their ratings practices for
mortgage-backed securities A mortgage-backed security (MBS) is a type of asset-backed security (an 'instrument') which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment ba ...
and that called into question the impartiality of their ratings. The results were reported to
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of a ...
in July 2008. The SEC immediately commenced a rulemaking which concluded on December 3, 2008 with approval of a series of measures to regulate the conflicts of interests, disclosures, internal policies, and business practices of
credit rating agencies A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may ra ...
. The regulations were intended to ensure that firms provide more meaningful ratings and greater disclosure to investors concerning
collateralized debt obligation A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS).Lepke ...
s and residential mortgage-backed securities. In an interview with ''
The Washington Post ''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large nati ...
'' in late December 2008, Cox said, "What we have done in this current turmoil is stay calm, which has been our greatest contribution—not being impulsive, not changing the rules willy-nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants." Cox added that the Commission's decision to impose a three-week ban on short selling of financial company stocks was taken reluctantly, but that the view at the time, including from Treasury Secretary
Henry M. Paulson Henry Merritt Paulson Jr. (born March 28, 1946) is an American banker and financier who served as the 74th United States Secretary of the Treasury from 2006 to 2009. Prior to his role in the Department of the Treasury, Paulson was the Chairman a ...
and
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
chairman
Ben Bernanke Ben Shalom Bernanke ( ; born December 13, 1953) is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Fed, he was appointed a distinguished fellow at the Brookings Institution. Durin ...
, was that "if we did not act and act at that instant, these financial institutions could fail as a result and there would be nothing left to save." In a December 2008 interview wit
Reuters
he explained that the SEC's Office of Economic Analysis was still evaluating data from the temporary ban, and that preliminary findings pointed to several unintended market consequences and side effects. "While the actual effects of this temporary action will not be fully understood for many more months, if not years ... knowing what we know now, I believe on balance the Commission would not do it again." Cox stepped down as Chairman of the SEC at the end of the Bush administration, on January 20, 2009.


Later career

Following his tenure at the SEC, Cox returned to his home in Southern California and the practice of law, which had been his pre-Washington profession. He joined the Boston-based international law firm of
Bingham McCutchen LLP Bingham McCutchen LLP was a global law firm with approximately 850 Lawyer, attorneys in nine US offices and five international offices. It ceased operations in late 2014, when several hundred of its partners and associate lawyers left the firm to j ...
as a partner in the firm's Corporate, M&A and Securities practice, resident in its
Orange County Orange County most commonly refers to: *Orange County, California, part of the Los Angeles metropolitan area Orange County may also refer to: U.S. counties *Orange County, Florida, containing Orlando *Orange County, Indiana *Orange County, New ...
office, where in 2014 The Best Lawyers in America named him Lawyer of the Year in the Corporate Governance category. He also served as president of Bingham Consulting LLC, the firm's global strategic consulting business. Following the November 2014 combination of Bingham and the Philadelphia-based international law firm of
Morgan, Lewis & Bockius Morgan, Lewis & Bockius LLP is an American multinational law firm with approximately 2,200 legal professionals in 31 offices across North America, Europe, Asia, and the Middle East. Mergers with other law firms stimulated global growth and led to ...
, Cox became a partner of Morgan Lewis and president of Morgan Lewis Consulting LLC. Other recent members of Morgan Lewis Consulting include former
Arizona Diamondbacks The Arizona Diamondbacks (colloquially known as the D-backs) are an American professional baseball team based in Phoenix. The Diamondbacks compete in Major League Baseball (MLB) as a member club of the National League (NL) West division. The f ...
and
San Diego Padres The San Diego Padres are an American professional baseball team based in San Diego. The Padres compete in Major League Baseball (MLB) as a member club of the National League (NL) West division. Founded in 1969, the club has won two NL penna ...
owner
Jeff Moorad Jeffrey S. Moorad is an American businessman and investor. He began his career as a sports agent, before serving as General Partner and CEO of MLB's Arizona Diamondbacks, and Vice-Chairman and CEO of MLB's San Diego Padres. Player representati ...
, former
National Labor Relations Board The National Labor Relations Board (NLRB) is an independent agency of the federal government of the United States with responsibilities for enforcing U.S. labor law in relation to collective bargaining and unfair labor practices. Under the Natio ...
chairman Philip Miscimarra, former
New Hampshire Governor The governor of New Hampshire is the head of government of New Hampshire. The governor is elected during the biennial state general election in November of even-numbered years. New Hampshire is one of only two states, along with bordering Verm ...
Steve Merrill Stephen Everett Merrill (June 21, 1946 – September 5, 2020) was an American lawyer and Republican politician from Manchester, New Hampshire. He served as the 77th governor of New Hampshire from 1993 to 1997. Early life Merrill was born in No ...
, former
California Governor The governor of California is the head of government of the U.S. state of California. The governor is the commander-in-chief of the California National Guard and the California State Guard. Established in the Constitution of California, the g ...
and
U.S. Senator The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and powe ...
Pete Wilson Peter Barton Wilson (born August 23, 1933) is an American attorney and politician who served as the 36th governor of California from 1991 to 1999. A member of the Republican Party, he also served as a United States senator from California bet ...
, former Clinton
White House The White House is the official residence and workplace of the president of the United States. It is located at 1600 Pennsylvania Avenue NW in Washington, D.C., and has been the residence of every U.S. president since John Adams in 1800. ...
Cabinet Secretary
Thurgood Marshall Jr. Thurgood Marshall Jr. (born August 12, 1956) is an American lawyer and son of the late Supreme Court of the United States Justice Thurgood Marshall. Marshall worked in the Bill Clinton White House and is a retired international law firm partner. ...
, and former U.S. Ambassador to Ukraine and
George Bush Presidential Library The George H.W. Bush Presidential Library and Museum is the presidential library and burial site of George H. W. Bush, the 41st president of the United States (1989–1993), and his wife Barbara Bush. Located on a site on the west campus of T ...
Executive Director
Roman Popadiuk Roman Popadiuk ( uk, Рома́н Попадю́к) (born May 30, 1950) is an American diplomat of Ukrainian descent. Popadiuk served as the first United States Ambassador to Ukraine under George H. W. Bush, from 1992 to 1993. He is a life trustee of the
University of Southern California The University of Southern California (USC, SC, or Southern Cal) is a Private university, private research university in Los Angeles, California, United States. Founded in 1880 by Robert M. Widney, it is the oldest private research university in C ...
and a member of the advisory boards of private equity firm Starr Investment Holdings, RevOZ Capital, the United States Energy Security Council, and the Loker Hydrocarbon Research Institute, founded by
Nobel Prize The Nobel Prizes ( ; sv, Nobelpriset ; no, Nobelprisen ) are five separate prizes that, according to Alfred Nobel's will of 1895, are awarded to "those who, during the preceding year, have conferred the greatest benefit to humankind." Alfr ...
winner George A. Olah. He formerly served on the boards of health care companies
Alphaeon Corporation Alphaeon Corporation is a company focused on healthcare products and services based in Irvine, California. Alphaeon Corporation serves healthcare providers in the self-pay segment; primarily plastic surgery, ophthalmology, dentistry, and dermatol ...
and Calhoun Vision, Inc., photonics manufacturer Newport Corporation, and governance, risk and compliance firm
Thomson Reuters Thomson Reuters Corporation ( ) is a Canadian multinational media conglomerate. The company was founded in Toronto, Ontario, Canada, where it is headquartered at the Bay Adelaide Centre. Thomson Reuters was created by the Thomson Corpora ...
. For ten years, he was a member of the board of directors of the
National Endowment for Democracy The National Endowment for Democracy (NED) is an organization in the United States that was founded in 1983 for promoting democracy in other countries by promoting political and economic institutions such as political groups, trade unions, ...
, and of the board of trustees of
Chapman University Chapman University is a private research university in Orange, California. It encompasses ten schools and colleges, including Fowler School of Engineering, Dodge College of Film and Media Arts, Fowler School of Law, and Schmid College of Scie ...
. The Forum for Corporate Directors honored Cox as a "Director of the Year" in March 2019 in the category of Corporate Governance. In June 2014, Cox was named a "Father of the Year" by the Father's Day Council and the
American Diabetes Association The American Diabetes Association (ADA) is a United States-based nonprofit that seeks to educate the public about diabetes and to help those affected by it through funding research to manage, cure and prevent diabetes (including type 1 diabetes, ...
in recognition of his "outstanding contributions to his family, profession and community."


References


External links


Official Biography
nbsp;– SEC Website

nbsp;– SEC
Press Release A press release is an official statement delivered to members of the news media for the purpose of providing information, creating an official statement, or making an announcement directed for public release. Press releases are also considere ...
*
President Bush Nominates Congressman Cox as SEC Chairman
nbsp;–
White House The White House is the official residence and workplace of the president of the United States. It is located at 1600 Pennsylvania Avenue NW in Washington, D.C., and has been the residence of every U.S. president since John Adams in 1800. ...
Press Release A press release is an official statement delivered to members of the news media for the purpose of providing information, creating an official statement, or making an announcement directed for public release. Press releases are also considere ...

Speeches and Statements as SEC Chairman

The changes I've seen
nbsp;– Farewell letter by Chris Cox in the ''
Orange County Register ''The Orange County Register'' is a paid daily newspaper published in California. The ''Register'', published in Orange County, California, is owned by the private equity firm Alden Global Capital via its Digital Fiest/Media News subsidiaries. ...
'' ;Congressional * , - , - , - , - , - , - , - {{DEFAULTSORT:Cox, Christopher 1952 births 21st-century American politicians American lawyers Businesspeople from Saint Paul, Minnesota Harvard Business School alumni Harvard Law School alumni Living people Members of the U.S. Securities and Exchange Commission People associated with Latham & Watkins People from Newport Beach, California Politicians from Saint Paul, Minnesota Reagan administration personnel Recipients of the Order of the Lithuanian Grand Duke Gediminas Republican Party members of the United States House of Representatives from California University of Southern California alumni George W. Bush administration personnel