Donaldson, 74, announced his resignation Wednesday after two-and-a-half years as the SEC’s 27th chairman.
The former Wall Street executive, who co-founded investment banking firm Donaldson, Lufkin and Jenrette, took the helm of the beleaguered market-regulating agency during a time of low consumer confidence following a series of corporate scandals that resulted in the nation’s two largest bankruptcy cases: Enron and WorldCom.
During his tenure, Donaldson implemented aggressive reforms generally unpopular with the business sector but hailed by investor-rights groups, including changes under the 2002 Sarbanes-Oxley Act aimed at making companies more accountable to their shareholders.
Donaldson, a Republican, often sided with Democrats on the commission to pass measures such as requiring mutual fund boards to be chaired by independent outsiders, hedge funds to register with the SEC, and, most recently, a regulation allowing investors to get the best price for their stocks, even if it means a slower trade execution.
His replacement, Representative Christopher Cox, will require Senate approval.
President Bush praised Cox at a press conference, saying, “In the years ahead, Chris will vigorously enforce the rules and laws that guarantee honesty and transparency in our markets and corporate boardrooms.”
Cox, who has served in Congress for 16 years, has a background that spans foreign policy, economic and homeland security issues. He is chairman of the House Homeland Security Committee and formerly served on the Financial Services Committee.
Cox said he would try to live up to the standards set by Donaldson.
“The rule of law that the SEC enforces has given America the most dynamic and vibrant capital markets in the world,” Cox said. “The unprecedented sharing of information about every productive part of our free-enterprise economy is only made possible by clear and consistently enforced rules, and those rules have to govern every market participant equally — big and small.”