Lone SEC Democrat To Leave Jan. 31
Tuesday, January 22, 2008
The lone Democrat at the Securities and Exchange Commission has notified the White House that she will depart at the end of the month, leaving the agency short-staffed at a time when the stock markets are volatile and Wall Street banks are posting enormous losses related to the mortgage crisis.
Annette L. Nazareth, who started her career at the SEC nearly a decade ago, told President Bush in a letter over the weekend that "it is time for me to pursue other professional opportunities" in the private sector. Her Jan. 31 departure means that the five-member commission will operate without any Democratic representatives at a critical time for the economy and in the waning months of the Bush administration.
The SEC is composed of three members from the president's political party and two from the opposing party. Nazareth's resignation, which she had said last year would be coming, follows the departure of the agency's senior Democrat, Roel C. Campos, for a law partnership in September.
The agency has a major role in policing corruption in the stock markets and protecting investors from fraud and abuses. In response to widespread problems with mortgage-backed investments, SEC enforcement officials have opened three dozen investigations into whether banks and lenders are downplaying their losses and whether executives enriched themselves by trading their own stock based on inside information.
SEC regulators also review risk-management practices at the nation's largest investment banks, an issue that has taken on new importance as financial institutions have tallied losses of more than $90 billion over housing troubles in the past few months.
Nazareth provided the sole voice of dissent last winter when the agency took up the hot-button issue of whether companies could exclude investor proposals related to board members from their proxy statements. At the time, she said the GOP majority had worked "explicitly and unreservedly to deny shareholder rights."
Nazareth had hoped to remain at her post until the Senate confirmed her replacement. Senate Majority Leader Harry M. Reid (D-Nev.) in November forwarded the president the names of two candidates to fill the Democratic vacancies. They are Elisse B. Walter, a longtime Washington regulator now at the Financial Industry Regulatory Authority, and Luis A. Aguilar, a corporate lawyer in Atlanta.
Both lawyers are undergoing lengthy background checks, and their candidacies have not advanced substantially. The nominations require approval from the White House and a vote in the full Senate.
"The president hopes to fill the positions soon," White House spokesman Gordon Johndroe said yesterday.