Donaldson Tapped to Head SEC
Donaldson’s mission, as outlined by Mr. Bush, is to “vigorously enforce our nation’s laws against corporate corruption.” The president said his administration also plans to boost the SEC’s budget to give it the resources to root out corporate malfeasance.
“I am firmly committed to doing everything that I can do to restore the confidence of investors in the U.S. corporate and financial industry,” Donaldson said after the president introduced him at the White House Tuesday.
Donaldson, 71, now heads Donaldson Enterprises, a private investment company that he founded in 1981. He co-founded the investment banking firm Donaldson Lufkin & Jenrette in 1959 and served as its chairman and chief executive. He was also chairman and CEO of the New York Stock Exchange from 1990 to 1995 and was chairman of the insurance giant Aetna, Inc. from 2000 to 2001.
Donaldson will replace Harvey Pitt, a former corporate lawyer and SEC staff lawyer, who resigned as chairman on Election Day under pressure over his handling of the appointment of William Webster to head new audit oversight panel and the financial debacle at Enron and other large corporations.
Sen. Charles Schumer (D-N.Y.), a member of the Senate Banking Committee, applauded Donaldson’s nomination.
“The SEC desperately needs someone who both has a deep knowledge of how the markets function and at the same time possesses a rock-ribbed integrity,” he said in a statement. “Bill Donaldson is such a man.”
A powerful Wall Street insider, Donaldson is seen by academic observers as a respected leader with close ties to the industry he would be regulating, a trait he shares with Pitt.
“He’s well respected. …He’s coming from awfully close to the industry. That is both an opportunity and a risk, as Harvey Pitt found out,” Georgetown University Law Professor Donald Langevoort told Reuters.
“He’s got to make a declaration of independence very quickly to convince investors that he’s on their side … If he doesn’t loudly and convincingly do that, he’s going to face the same kind of questions that Pitt did,” Langevoort said.
Donaldson was a founder of Yale University’s Graduate School of Management and served as its first dean. In 1975, he served as counsel to Vice President Nelson Rockefeller. Before that, he was undersecretary of state under Secretary Henry Kissinger from 1973 to 1975.
A native of Buffalo, N.Y., Donaldson’s first job on Wall Street was at the old brokerage firm G.H. Walker & Co., run by former President George H.W. Bush’s uncle Herbert Walker. Donaldson was a Yale University classmate of the former president’s brother, Jonathan, and is a friend of the Bush family.