June 1, 2009

Cox diluted SEC enforcement, some say

Christopher Cox's policies while he led the Securities and Exchange Commission frequently stalled or diluted corporate penalties, several SEC officials said.

Clearly some people wonder, 'If they don't want these kinds of cases, why should I bother doing them even though they're very important,' James Coffman, a former assistant director of the SEC's enforcement division, told The Washington Post Monday.

Other officials spoke anonymously, as they were unauthorized to speak to the press, the newspaper said.

In a recent interview Cox said, Corporate penalties are an important part of the agency's enforcement arsenal, but the SEC's new director Mary Shapiro speaks frequently of taking handcuffs off of the enforcement division.

In a report released in May, the Government Accountability Office, said SEC policies in 2006 and 2007, led to less vigorous pursuit of corporate penalties "¦ and could have compromised the quality of settlements.

SEC corporate penalties dropped from $1.59 billion in 2005 to $256 million in 2008.

Some investigative attorneys came to see the commission as less of an ally in bringing enforcement actions and more of a barrier, the GAO said.