Tuesday, October 07, 2008

Cox Under Fire

This ain't lookin' pretty for Chris Cox.

U.S. Securities and Exchange Commission Chairman Christopher Cox's regulators stood by as shrinking capital ratios and growing subprime holdings led to the collapse of Bear Stearns Cos., according to an unedited version of a study by the agency's inspector general.

The report, by Inspector General H.
David Kotz, was requested by Senator Charles Grassley to examine the role of regulators prior to the firm's collapse in March. Before it was released to the public on Sept. 26, Kotz deleted 136 references, many detailing SEC memos, meetings or comments, at the request of the agency's Division of Trading and Markets that oversees investment banks.

``People can judge for themselves, but it sure looks like the SEC didn't want the public to know about the red flags it apparently ignored in allowing Bear Stearns and other investment banks to engage in excessively risky behavior,'' the Iowa Republican said in an e-mailed statement.

On another blog, (UPDATE: IT IS LINKED. IT IS NO RUNNY. IT WAS WITH SHOEBOX.) I defended Cox' decisions on a somewhat-related question: whether Cox should or should not have "suspended" mark-to-market. That's still a somewhat open question.

But this report, if accurate, does significant damage to Cox and the SEC in general.

It's possible that McCain knew about this report (in general terms) before he lambasted Cox--and now it seems as though he was justified.


Shoebox said...

"On another blog?" with the fun we've had especially over that topic, it's just "another blog?"

I feel so used! :)

Shoebox said...

Aw, shucks, you shouldn't have! :)

Seriously, as I read the post and a few other things, I think Cox had the ability to take some action and didn't. The more, admittedly Monday morning qb'ing, on this I read, the more it appears to me that Cox froze under fire.