Democrats Nominate 2 for SEC Vacancies
Wednesday, November 14, 2007
Democratic leaders in the Senate have selected a corporate lawyer from Atlanta and a longtime financial industry regulator to fill their party's two vacancies at the Securities and Exchange Commission, according to people briefed on the nominations.
Senate Majority Leader Harry M. Reid (D-Nev.) has forwarded the names of Luis A. Aguilar and Elisse B. Walter to the White House for vetting, according to the sources, who spoke on condition of anonymity because the process is not complete. The candidates still require extensive background checks that could take weeks, if not months, before President Bush and the full Senate act on their nominations.
Word of the nominations comes as SEC Chairman Christopher Cox prepares to testify today at a Senate hearing about his plans to advance a proposal that critics argue would give shareholders less of a voice in the makeup of corporate boards of directors. With the SEC composed of three Republicans and one lame-duck Democrat, Cox's attempt to set new rules before proxy season has drawn attacks from labor groups and shareholder rights advocates.
Key lawmakers on Capitol Hill, where Cox served as a member of the GOP leadership before joining the SEC two years ago, have urged Cox to wait to make any changes to the way companies nominate board members until two Democratic candidates have been confirmed.
Aguilar, a partner at McKenna Long & Aldridge in Atlanta, has drawn criticism among union representatives and former SEC officials for casting doubt in published interviews on the effectiveness of parts of the 2002 Sarbanes-Oxley law, passed to increase corporate accountability after accounting scandals rocked investor confidence. Aguilar also served as a top lawyer at Invesco, a multibillion-dollar investment company. Early in his career he served as an SEC staff lawyer.
If confirmed, Aguilar would replace Roel Campos, the agency's first Hispanic commissioner, who left after five years for a law practice last summer. Aguilar, who received strong backing from Sen. Robert Menendez (D-N.J.), a member of the Senate Banking committee, did not return calls yesterday.
Walter, a onetime chief operating officer at the NASD, the premier regulator for brokerage firms, has a long history in Washington. In recent years, Walter has focused on educating and warning investors about scams, and on improving regulation of mutual funds. She is former general counsel of the Commodity Futures Trading Commission and served for more than a decade in various posts at the SEC, including a stint as the deputy director of the unit that oversees corporate filings. Nancy Condon, a spokeswoman at the regulator now known as the Financial Industry Regulatory Authority, declined to comment on Walter's behalf.
Walter would replace Annette Nazareth, who has announced that she will leave the agency for the private sector as early as the end of the year.
The need to fill two SEC slots touched off an intense lobbying battle between Democrats who want to give a freer hand to business, and union leaders and others who advocate for heightened regulation of industry. Unhappy with Aguilar, labor groups had pushed Damon A. Silvers, a lawyer at the AFL-CIO, for one of the Democratic slots.
The SEC supervises the markets, makes policy for accounting firms and publicly traded companies, and enforces laws against insider trading and fraud. It grew in prominence after financial scandals five years ago.