Editing Christopher Cox (section)

=== U.S. Securities and Exchange Commission ===
[[File:President George W. Bush names Representative Christopher Cox as his nominee for SEC Chairman.jpg|thumb|right|Cox with President [[George W. Bush]] in 2005]]
Cox was nominated by President [[George W. Bush]] to be the 28th chairman of the [[United States Securities and Exchange Commission]] (SEC) on June 2, 2005, and unanimously confirmed by the [[United States Senate]] on July 29, 2005. He was sworn in on August 3, 2005, the day after his resignation from Congress.

Shortly after becoming [[U.S. Securities and Exchange Commission|SEC]] Chairman, he was diagnosed with thymoma, a rare form of cancer, and underwent surgery in January 2006 to remove a tumor from his chest. He returned to work "after several weeks recovering from surgery," according to The [[Associated Press]].<ref>[https://www.boston.com/news/nation/washington/articles/2006/02/27/secs_cox_says_feeling_better_after_surgery/ 'SEC's Cox says feeling better after surgery,'], Reuters, February 27, 2006; [http://www.nysscpa.org/home/2006/206/4week/article12.htm 'Christopher Cox Returns to Work at SEC'], NY State Society of CPAs News Staff, February 1, 2006; Duncan Currie, "Unmasking Chris Cox," The American, March/April 2007.</ref> (The cancer returned 10 years later, but Cox was again given a clean bill of health after surgery and treatment.)<ref>"Chris Cox Chose Proton Therapy to Treat Recurrent Thymoma," Scripps Health, April 19, 2017, retrieved at {{cite web|url=https://www.scripps.org/news_items/6062-chris-cox-chose-proton-therapy-to-treat-recurrent-thymoma|title=Chris Cox Chose Proton Therapy to Treat Recurrent Thymoma|date=February 5, 2008 |access-date=November 12, 2017}}</ref>

In May 2008, Cox delivered the Commencement Address at [[Northeastern University]] in [[Boston]], Massachusetts.<ref>{{cite web|url=https://www.sec.gov/news/speech/2008/spch050208cc.htm |title=Text of Speech by SEC Chairman: Northeastern University Commencement Address, TD Banknorth Garden, Boston, Massachusetts, May 2, 2008 |publisher=Sec.gov |date=May 2, 2008 |access-date=March 3, 2014}}</ref> In April 2008, he received the [[University of Southern California]]'s highest award, the Asa V. Call Achievement Award, in a ceremony at the Los Angeles [[Millennium Biltmore Hotel]].<ref>{{cite web|url=https://www.youtube.com/watch?v=YlfSAlakdOw  |archive-url=https://ghostarchive.org/varchive/youtube/20211212/YlfSAlakdOw| archive-date=December 12, 2021 |url-status=live|title=USC Alumni Association 75th Alumni Awards, Tribute Video for Asa V. Call Award Winner Christopher Cox |publisher=Youtube.com |date=November 3, 2008 |access-date=March 3, 2014}}{{cbignore}}</ref>

The [[Housing and Economic Recovery Act of 2008]], enacted in July 2008, gave Cox one of five seats on the Federal Housing Finance Oversight Board, which advises the Director of the [[Federal Housing Finance Agency]] with respect to overall strategies and policies regarding the safety and soundness of [[Fannie Mae]], [[Freddie Mac]], and the [[Federal Home Loan Banks]]. In September 2008, the [[United States Congress|U.S. Congress]] passed and [[George W. Bush|President Bush]] signed the [[Emergency Economic Stabilization Act of 2008]], which placed Cox on the newly established [[Financial Stability Oversight Board]] to oversee the $700&nbsp;billion [[Troubled Assets Relief Program]].

==== Regulatory initiatives ====
During his tenure, Cox led the [[U.S. Securities and Exchange Commission|Commission]] to implement new executive compensation rules. Since the early 1990s, support for reform had been growing, urged by the U.S. [[Financial Accounting Standards Board]] and others. Relying in part on FASB's recommendations for improved presentation of compensation information, the Cox reforms made it possible for users of financial statements to readily understand how public company executives are compensated. Newly required information included the lump-sum cost of retirement benefits and explanations of why specific stock option grants were approved.<ref>17 The Cox reforms are included in CFR Parts 228, 229, 232, 239, 240, 245, 249 and 274, https://www.sec.gov/rules/final/2006/33-8732a.pdf</ref> ''[[The New York Times]]'' observed that the [[U.S. Securities and Exchange Commission|Commission]] "largely stood its ground amid pressure from compensation specialists, investor advocates, and industry groups." With more than 20,000 comment letters, Cox said, "No issue in the history of the [[U.S. Securities and Exchange Commission|SEC]] has generated such interest."<ref>{{cite news|url=https://www.nytimes.com/2006/07/27/business/27pay.html|title=Pay Rules Adopted by S.E.C.|first=Eric|last=Dash|newspaper=The New York Times |date=July 27, 2006|access-date=June 18, 2017}}</ref>

One of his first initiatives was launching a plain English effort, to eliminate legalese in investor communications in favor of clear language that let investors focus on what was important, the better to hold a company's performance up to the light of day. Not only the executive compensation rules,<ref>{{cite web|url=https://www.sec.gov/news/speech/2007/spch101207cc.htm |title="SEC's Cox Wants 'Plain English' In Pay Disclosures'", ''The Washington Post'', March 9, 2007, p. D3 |publisher=Sec.gov |date=October 12, 2007 |access-date=March 3, 2014}}</ref><ref>{{cite web|url=https://www.washingtonpost.com/wp-dyn/content/article/2007/03/08/AR2007030802088.html |title="US SEC's Cox seeks plain English on CEO pay data", Reuters, March 8, 2007 |work=Washingtonpost.com |date=March 9, 2007 |access-date=March 3, 2014}}</ref><ref>{{cite web|last=Wutkowski |first=Karey |url=https://www.reuters.com/article/governmentFilingsNews/idUSN0827967520070308 |title=US SEC's Cox seeks plain English on CEO pay data |publisher=Reuters |date=March 8, 2007 |access-date=August 13, 2012}}</ref> but also disclosure rules for investment advisors<ref>{{cite web|url=https://www.sec.gov/rules/proposed/2008/ia-2711.pdf |title=Microsoft Word - Proposing Release for Part 2 of Form ADV _FINAL_ _2_.doc |access-date=March 3, 2014}}</ref> and mutual funds—where more than half of U.S. households had their retirement and college savings—were subjected to the plain English requirements.<ref>{{cite web|url=https://www.sec.gov/news/press/2007/2007-234.htm |title=SEC Votes to Propose Improvement of Mutual Fund Disclosure |publisher=Sec.gov |date=November 15, 2007 |access-date=March 3, 2014}}</ref> Under Cox the [[U.S. Securities and Exchange Commission|SEC]] wrote new rules requiring the $10.6&nbsp;trillion mutual fund industry to make their prospectuses easier for investors to read, understand, and access.<ref>{{cite web|url=https://www.sec.gov/rules/proposed/2007/33-8861.pdf |title=Proposed Rule: Enhanced Disclosure and New Prospectus Delivery Option for Registered Open-End Management Investment Companies |access-date=March 3, 2014}}</ref>

Cox defended the 2002 [[Sarbanes–Oxley Act]] and resisted efforts to repeal it or scale it back legislatively.<ref>[http://www.marketwatch.com/News/Story/Story.aspx?guid={FE9B5509-4F1C-4C78-B3A5-7B42992335BE}&dist=rss&siteid=mktw&rss=1 "SEC Chairman Defends Sarbanes–Oxley", ''MarketWatch''], September 19, 2006</ref><ref>[https://www.bloomberg.com/apps/news?pid=20601087&sid=aVWspn9IjJTQ&refer=home "SEC's Cox Says He Opposes Weakening Sarbanes–Oxley", Bloomberg News], March 14, 2007</ref><ref>[http://www.accessmylibrary.com/coms2/summary_0286-29980783_ITM "SEC Chair Cox Defends Sarbanes–Oxley", CBS MarketWatch] March 14, 2007</ref> The greatest source of complaint about the law during his tenure was its Section 404, which produced compliance expenses far higher than the [[U.S. Securities and Exchange Commission|SEC]] under his predecessor had predicted.<ref>[https://archive.today/20070810231113/http://www.insidesarbanesoxley.com/sarbanes_oxley_blog/2005/03/fei-survey-sox-404-compliance-costs-up.asp "FEI Survey: SOX 404 Compliance Costs Up 39 percent"] March 21, 2005</ref> Working with the [[Public Company Accounting Oversight Board]], the [[U.S. Securities and Exchange Commission|SEC]] under Cox replaced the original auditing standard for Section 404 with a streamlined, more cost-effective version,<ref>{{cite web|url=https://www.sec.gov/news/press/2007/2007-144.htm |title="SEC Approves PCAOB Auditing Standard No. 5 Regarding Audits of Internal Control Over Financial Reporting; Adopts Definition of "Significant Deficiency" |publisher=Sec.gov |access-date=March 3, 2014}}</ref> and also provided new guidance for management intended to reduce unnecessary costs.<ref>[https://www.sec.gov/news/press/2007/2007-101.htm "SEC Approves New Guidance for Compliance with Section 404 of Sarbanes–Oxley"] May 23, 2007</ref> At Cox's direction the agency undertook a nationwide Small Business Cost-Benefit Study<ref>{{cite web|url=http://securities.stanford.edu/news-archive/2008/20080701_Headline107388_Group.html |title=Archived copy |access-date=January 11, 2009 |url-status=dead |archive-url=https://web.archive.org/web/20110507051515/http://securities.stanford.edu/news-archive/2008/20080701_Headline107388_Group.html |archive-date=May 7, 2011  }}</ref> to determine whether, as intended, the new auditing standard and management guidance had made compliance less expensive and better focused the 404 process on control elements that truly matter for companies of all sizes.<ref>{{cite web|url=https://www.sec.gov/news/press/2007/2007-62.htm |title=SEC Commissioners Endorse Improved Sarbanes–Oxley Implementation To Ease Smaller Company Burdens, Focusing Effort On 'What Truly Matters' |publisher=Sec.gov |date=April 4, 2007 |access-date=March 3, 2014}}</ref>

In June 2007 the [[U.S. Securities and Exchange Commission|Commission]] voted unanimously to repeal the so-called "[[uptick rule]]" or [[Uptick rule|"tick test."]]<ref>{{cite web|url=https://www.sec.gov/news/press/2007/2007-114.htm |title=SEC Votes on Regulation SHO Amendments and Proposals; Also Votes to Eliminate 'Tick' Test |publisher=Sec.gov |access-date=March 3, 2014}}</ref> The action was not controversial at the time: it was taken after an extensive multi-year study by the Office of Economic Analysis, begun in 2003 under [[William H. Donaldson|Chairman Bill Donaldson]].<ref>[http://www.hedgeweek.com/articles/detail.jsp?content_id=9293 "SEC proposes changes to short selling rules", ''Hedge Week''] October 24, 2003</ref> The study found that the rule—which had never applied on [[NASDAQ]] or to [[Electronic communication network|ECNs]] and other trading systems—had been rendered ineffective on the [[NYSE]] due to [[decimalization]] (that is, the reduction of the "tick" increment to a penny, as compared to the 1/8 or 12½¢ that was in effect when the rule was adopted in 1938).<ref>{{cite web|url=https://www.sec.gov/rules/final/2007/34-55970.pdf |title=Final Rule: Regulation SHO and Rule 10a-1 |access-date=March 3, 2014}}</ref> Its repeal later became the subject of much debate, with some advocating its reinstatement. On July 15, 2008, Cox told a [[U.S. House of Representatives|U.S. House]] hearing that the [[U.S. Securities and Exchange Commission|Commission]] was studying the potential institution of "a price test that could work with an increment of a nickel or dime" or some more meaningful amount.<ref>[http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_house_hearings&docid=f:44903.pdf "Systemic Risk and the Financial Markets", Hearing Before the Committee on Financial Services, U.S. House of Representatives] July 24, 2008</ref>

==== Technological modernization ====
Technological modernization of the [[U.S. Securities and Exchange Commission|SEC]] was a Cox priority throughout his tenure. He introduced new technology for investor disclosure,<ref>[https://www.sec.gov/spotlight/idea.shtml Spotlight on Interactive Data Electronic Applications] {{webarchive |url=https://web.archive.org/web/20081218133311/http://www.sec.gov/spotlight/idea.shtml |date=December 18, 2008 }}</ref> compliance analytics,<ref>According to the SEC 2008 Annual Report, "The Risk Assessment Database for Analysis and Reporting (RADAR) automates [the] risk assessment and mapping process [to] identify and respond quickly to new or resurgent forms of fraudulent, illegal, or questionable behavior or products. Using RADAR, examiners nationwide can identify and prioritize risks to investors, registrants, and markets, which the SEC analyzes to determine examination priorities and develop appropriate regulatory responses." 2008 Performance and Accountability Report, https://www.sec.gov/about/secpar/secpar2008.pdf#sec1</ref> nationwide investigative work sharing,<ref>{{cite web|url=https://www.sec.gov/news/speech/2007/spch120407cc.htm |title=SEC Chairman Christopher Cox's remarks introducing 'The Hub', December 4, 2007 |publisher=Sec.gov |date=December 4, 2007 |access-date=March 3, 2014}}</ref> and management of funds recovered for investors.<ref>"Phoenix [is] our updated software system that will track every disgorgement, penalty, and other monies owed to the SEC and to investors." [https://www.sec.gov/news/speech/2008/spch020808cc.htm Speech by SEC Chairman: 'The SEC Agenda for 2008']</ref> In August 2008 he rolled out the future replacement of the [[U.S. Securities and Exchange Commission|SEC]]'s forms-based disclosure database, called [[EDGAR]], with a new interactive disclosure system using computer-tagged data in the [[XBRL|eXtensible Business Reporting Language]] ([[XBRL]]).<ref>{{cite web|url=https://www.sec.gov/news/press/2008/2008-179.htm |title="SEC Announces Successor To EDGAR Database," August 19, 2008 |publisher=Sec.gov |access-date=March 3, 2014}}</ref> The new system was designed to let future investors easily search, sort, and recombine information to generate reports and analysis from hundreds of thousands of companies and millions of forms.<ref>{{cite web|last=Howlett |first=Dennis |url=http://blogs.zdnet.com/Howlett/?p=461 |title="SEC Introduces IDEA," ZDNet, August 19, 2008 |publisher=[[ZDNet]] |date=August 19, 2008 |access-date=March 3, 2014 |url-status=dead |archive-url=https://web.archive.org/web/20080924221357/http://blogs.zdnet.com/Howlett/?p=461 |archive-date=September 24, 2008  }}</ref> Under Cox the [[U.S. Securities and Exchange Commission|SEC]] oversaw the creation of a taxonomy of over 11,000 XBRL data tags that catalog every element of [[U.S. Generally Accepted Accounting Principles]].<ref>{{cite web |url=http://www.cfo.com/article.cfm/9859282?f=rsspage |title="GAAP Goes Interactive," CFO.com, September 25, 2007 |publisher=Cfo.com |date=September 25, 2007 |access-date=March 3, 2014 |archive-url=https://web.archive.org/web/20090323154934/http://www.cfo.com/article.cfm/9859282?f=rsspage |archive-date=March 23, 2009 |url-status=dead }}</ref> In 2008 the [[U.S. Securities and Exchange Commission|Commission]] issued rules requiring all publicly traded companies and mutual funds in the United States to tag their financial information.<ref>{{cite web|url=https://www.sec.gov/news/press/2008/2008-300.htm |title=SEC Approves Interactive Data for Financial Reporting by Public Companies, Mutual Funds |publisher=Sec.gov |access-date=March 3, 2014}}</ref>

Another Cox technology initiative liberalized the proxy rules to allow investors and companies to use Electronic Shareholder Forums—virtual meeting places on the Internet to promote shareholder initiatives, conduct straw polls, apprise a company's directors of critical shareholder concerns, and inform shareholders of management's and directors' views.<ref>{{cite web|url=https://www.sec.gov/rules/final/2008/34-57172.pdf |title=Final Rule |access-date=March 3, 2014}}</ref>

In 2006 the [[U.S. Securities and Exchange Commission|SEC]] launched a war against Internet financial [[Spam (electronic)|spam]], shutting down trading in companies that touted their stock by clogging investors’ in-boxes. Investor complaints about the practice fell from more than 220,000 per month in December 2006 to 70,000 per month in February 2007; Internet software and services company [[NortonLifeLock|Symantec]] credited the [[U.S. Securities and Exchange Commission|SEC]] with cutting financial spam by 30 percent.<ref>{{cite web|url=http://pcworld.about.net/od/businesscenter/SEC-suspends-trading-of-firms.htm|archive-url=https://archive.today/20130116073346/http://pcworld.about.net/od/businesscenter/SEC-suspends-trading-of-firms.htm|url-status=dead|title=SEC suspends trading of firms susceptible to stock spam|date=January 16, 2013|archive-date=January 16, 2013|access-date=June 18, 2017}}</ref>

These technological initiatives were widely supported, with one observer noting that Cox "earned virtually universal plaudits for efforts to modernize technology, transparency, and understandability of corporate reports, and to provide for apples-to-apples comparisons (for the first time ever) of corporate executive compensation."<ref>{{cite web|url=http://spectator.org/archives/2009/03/06/cox-exchange |title=''The American Spectator'' |publisher=Spectator.org |access-date=March 3, 2014 |url-status=dead |archive-url=https://web.archive.org/web/20130907185528/http://spectator.org/archives/2009/03/06/cox-exchange |archive-date=September 7, 2013  }}</ref>

==== Individual investors and seniors ====
The particular needs of senior investors, whose ranks are growing rapidly, was a special Cox focus. In April 2006, the [[U.S. Securities and Exchange Commission|SEC]] held its first “Seniors Summit”, working with [[AARP]], the [[Financial Industry Regulatory Authority]], the [[North American Securities Administrators Association]], and several state regulators; the conferences are now held annually.<ref>{{cite web|url=https://www.sec.gov/news/press/2008/2008-207.htm |title=SEC Seniors Summit to Help Securities Firms and Professionals Better Serve Older Investors |publisher=Sec.gov |date=September 17, 2008 |access-date=March 3, 2014}}</ref> A nationwide sweep examination conducted by the [[U.S. Securities and Exchange Commission|SEC]] and authorities in seven states found that "free lunch" investment seminars, which draw large numbers of retirees, routinely involved significant [[securities fraud|fraud]].<ref>{{cite web|url=https://www.washingtonpost.com/wp-dyn/content/article/2007/09/04/AR2007090402281.html |title="Investment Pitches Prey On Elderly; Vulnerable Group Ensnared By Salesmen, Officials Say" Washington Post, September 5, 2007, Page A1 |work=Washingtonpost.com |date=September 5, 2007 |access-date=March 3, 2014}}</ref><ref>{{cite web|url=https://www.sec.gov/news/press/2007/2007-179.htm |title='Free Lunch' Investment Seminar Examinations Uncover Widespread Problems, Perils for Older Investors |publisher=Sec.gov |date=September 10, 2007 |access-date=March 3, 2014}}</ref> Many were advised to put their retirement funds into equity-indexed annuities, where they could get stock market returns while keeping their money “safe”. But neither these investments, nor the sales agents, were registered with state or federal securities regulators—and investors were frequently unaware that it would be impossible to get their money back for as much as 15 years without paying a stiff penalty.<ref>{{cite web|url=https://www.sec.gov/news/speech/2008/spch062508cc_annuity.htm |title=Statement at Open Meeting on Equity Indexed Annuities |publisher=Sec.gov |date=June 25, 2008 |access-date=March 3, 2014}}</ref> The [[U.S. Securities and Exchange Commission|SEC]] enacted rules in 2008 to protect seniors and other investors from fraudulent and abusive practices in annuities sales.<ref>{{cite web|url=https://www.sec.gov/news/press/2008/2008-298.htm |title=SEC Improves Protections for Seniors and Other Investors in Equity-Indexed Annuities |publisher=Sec.gov |access-date=March 3, 2014}}</ref>

==== International integration ====
During Cox's tenure the [[U.S. Securities and Exchange Commission|SEC]] significantly expanded its international activity. Between 2005 and 2008, Cox signed supervisory arrangements covering enforcement and regulatory cooperation with regulators in the United Kingdom, France, the Netherlands, Belgium, Portugal, Australia, Germany, Bulgaria, and Norway.<ref>{{cite web|url=https://www.sec.gov/about/secpar/secpar2008.pdf#sec1 |title=SEC 2008 Annual Report |access-date=March 3, 2014}}</ref> As Chairman of the [[International Organization of Securities Commissions]]' Technical Committee, he led international efforts to converge [[U.S. Generally Accepted Accounting Principles|U.S. GAAP]] and [[International Financial Reporting Standards]]. In December 2007, the SEC adopted rules to permit foreign issuers to use [[International Financial Reporting Standards|IFRS]] without reconciliation to U.S. GAAP. And in November 2008, the
SEC issued a roadmap&nbsp;– with clear milestones along the way — that would lead to a Commission decision as early as 2014 on whether or not U.S. public companies should be required to use [[International Financial Reporting Standards|IFRS]].<ref>{{cite web|url=https://www.sec.gov/news/speech/2008/spch082708cc_ifrs.htm |title=Speech by SEC Chairman: "Proposing a Roadmap Toward IFRS" |publisher=Sec.gov |access-date=March 3, 2014}}</ref> Cox also initiated a mutual recognition process for foreign regulators, based on an assessment of whether the securities regulatory system in another country produces comparably high-quality results for investors, including in the area of enforcement.<ref>{{cite web|url=https://www.sec.gov/news/press/2008/2008-49.htm |title=SEC Announces Next Steps for Implementation of Mutual Recognition Concept, March 24, 2008 |publisher=Sec.gov |access-date=March 3, 2014}}</ref> In August 2008 he executed an arrangement<ref>[https://www.sec.gov/about/offices/oia/oia_mututal_recognition/australia/enhanced_enforcement_mou.pdf Memorandum of Understanding Concerning Consultation, Cooperation and the Exchange of Information Related to the Enforcement of Securities Laws] {{Webarchive|url=https://web.archive.org/web/20170827173631/https://www.sec.gov/about/offices/oia/oia_mututal_recognition/australia/enhanced_enforcement_mou.pdf |date=August 27, 2017 }} August 25, 2008</ref> with the [[Australian Securities & Investments Commission]] under which the SEC could approve exemptions allowing Australian-registered securities exchanges to operate in the U.S. without having also to register with the SEC, and U.S. exchanges would have the same privilege in Australia.<ref>
[https://www.sec.gov/news/press/2008/2008-182.htm SEC, Australian Authorities Sign Mutual Recognition Agreement] August 25, 2008</ref> As of 2008, the SEC was in mutual recognition discussions with regulators in Canada,<ref>[http://www1.cchwallstreet.com/ws-portal/content/news/container.jsp?fn=07-07-08 "SEC Moves Closer to Mutual Recognition", ''CCH Wall Street'']{{dead link|date=November 2016 |bot=InternetArchiveBot |fix-attempted=yes }} July 7, 2008</ref> and also in preliminary discussions with the Committee of European Securities Regulators.<ref>[https://www.sec.gov/news/press/2008/2008-9.htm Statement of the European Commission and the U.S. Securities and Exchange Commission on Mutual Recognition in Securities Markets] February 1, 2008</ref>

==== Law enforcement ====
International enforcement also stepped up considerably under Cox.<ref>[http://www1.cchwallstreet.com/ws-portal/content/news/container.jsp?fn=12-10-08 "SEC Boosts Enforcement Budget", ''CCH Wall Street'']{{dead link|date=November 2016 |bot=InternetArchiveBot |fix-attempted=yes }} December 10, 2008</ref> In 2008, the [[U.S. Securities and Exchange Commission|SEC]] made 556 requests of foreign regulators for assistance with SEC investigations, many of which were connected to potential wrongdoing in the subprime market.<ref>{{cite web|url=https://www.sec.gov/news/speech/2008/spch110708cc.htm |title=Speech by SEC Chairman: "The Importance of International Enforcement Cooperation in Today's Markets" |publisher=Sec.gov |date=November 7, 2008 |access-date=March 3, 2014}}</ref> Among the significant international cases the [[U.S. Securities and Exchange Commission|Commission]] brought during this period were the highly publicized 2008 charges against Hong Kong-based insider trading in [[Dow Jones & Company|Dow Jones]] prior to its acquisition by [[News Corporation (1980–2013)|News Corporation]].<ref>{{cite web|url=https://www.sec.gov/news/press/2008/2008-11.htm |title=SEC Charges Former Dow Jones Board Member, Three Other Hong Kong Residents in $24 Million Insider Trading Settlement |publisher=Sec.gov |access-date=March 3, 2014}}</ref> Under Cox the SEC also brought the largest number of cases in its history charging corporations and their officers with foreign bribery under the [[Foreign Corrupt Practices Act]] and imposed record penalties for these cases.<ref>[http://www.gibsondunn.com/publications/pages/2007Year-EndFCPAUpdate.aspx "2007 Year-End FCPA Update," Gibson, Dunn & Crutcher Publication] {{Webarchive|url=https://web.archive.org/web/20090103141700/http://www.gibsondunn.com/publications/pages/2007Year-EndFCPAUpdate.aspx |date=January 3, 2009 }} January 4, 2008</ref>

Overall, enforcement was Cox's stated priority beginning in 2005<ref>[http://www.sptimes.com/2005/11/12/news_pf/Business/Cox__SEC_to_keep_inve.shtml "Cox: SEC to Keep Investors First"], Associated Press, November 12, 2005</ref> and throughout his chairmanship.<ref>{{cite web|url=https://www.sec.gov/news/speech/2007/spch020907cc.htm |title=Speech by SEC Chairman: "Opening Remarks to the Practising Law Institute's SEC Speaks Series" |publisher=Sec.gov |date=February 9, 2007 |access-date=March 3, 2014}}</ref> He moved quickly to settle the debate over whether it was legitimate to impose penalties on corporations, adopting a policy that made clear the [[U.S. Securities and Exchange Commission|SEC]] "isn't turning out to be the corporate-friendly place that many in the boardroom set were hoping for."<ref>[http://www.businessweek.com/bwdaily/dnflash/jan2006/nf2006015_7863_db038.htm "No Slack At Cox's SEC", ''Business Week''] {{webarchive |url=https://web.archive.org/web/20080608025908/http://www.businessweek.com/bwdaily/dnflash/jan2006/nf2006015_7863_db038.htm |date=June 8, 2008 }} January 5, 2006</ref> Within the [[U.S. Securities and Exchange Commission|SEC]] budget, as of 2008, he had increased the share devoted to enforcement to its highest level in 20 years.<ref name="sec.gov">{{cite web|url=https://www.sec.gov/about/secpar/secpar2008.pdf#sec1 |title=Message from the Chairman, SEC 2008 Annual Report, p. 3 |access-date=March 3, 2014}}</ref> Nonetheless, the [[U.S. Securities and Exchange Commission|SEC]]'s overall appropriation was held steady during two of his budget years, first by a Republican and then a Democratic Congress, and it was increased by only 2% in a third year.<ref>[https://www.sec.gov/news/testimony/2008/ts041608cc.htm SEC Fiscal Year 2009 Appropriations Request], April 16, 2008</ref> These sub-inflation agency budgets, combined with merit pay increases for staff, caused the total enforcement personnel to decline.<ref>[https://www.washingtonpost.com/wp-dyn/content/article/2006/11/02/AR2006110201701.html "SEC Enforcement Cases Decline 9%; Staff Reduced Because of Budget Crunch", ''The Washington Post'', p. D3] November 3, 2006</ref> Critics attacked the underfunding of the [[U.S. Securities and Exchange Commission|SEC]] and blamed Cox,<ref>[http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20070402/FREE/70330026/1003/EDITORIAL "SEC Chief Missed the Boat at Budget Hearing", ''Investment News''] April 2, 2007</ref> though Congress<ref>[http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080519/REG/146014631/1009/rss01&rssfeed=rss01 "Some in Congress Worried About Meager Increase in SEC Proposed Budget", ''Investment News''] May 19, 2008</ref> and the administration<ref>[http://www.cfo.com/article.cfm/8657849/2/c_2984347?f=related "Bush Puts SEC Budget on a Diet", CFO.com] {{Webarchive|url=https://web.archive.org/web/20090323152141/http://www.cfo.com/article.cfm/8657849/2/c_2984347?f=related |date=March 23, 2009 }} February 6, 2007</ref> clearly shared the responsibility. When the agency budget was finally increased in fiscal 2008, he increased enforcement personnel by 4%.<ref name="sec.gov" />

Beginning early in his chairmanship he focused the agency's enforcement efforts on [[Options backdating|stock option backdating]], an illicit practice that had been exposed after the 2002 [[Sarbanes–Oxley Act]] changed the rules regarding the reporting of [[Employee stock option|stock option]] grants.<ref>[http://www.businessweek.com/investing/content/may2006/pi20060523_848601.htm "Backdated Options, Future Rules?", ''Business Week''] {{webarchive |url=https://web.archive.org/web/20110523233102/http://www.businessweek.com/investing/content/may2006/pi20060523_848601.htm |date=May 23, 2011 }} May 23, 2006</ref> Under Cox the [[U.S. Securities and Exchange Commission|SEC]] investigated more than 160 [[Options backdating|stock option backdating]] cases,<ref>[https://www.bloomberg.com/apps/news?pid=20601087&sid=avxEFbA2CFfs&refer=home "SEC Aims to End Backdating Cases in `Short Order' Thomsen Says", ''Bloomberg News''] January 25, 2008</ref> aided by the fact that the reporting forms for [[Employee stock option|stock option]] disclosure were among the first to be mandated in “interactive data” format.<ref>{{cite web|url=http://www.cwsl.edu/content/journals/Brunka.pdf |title=Xbrl And The Sec: How The Commission Uses Interactive Data To Investigate Illegal Stock Options Backdating And What Interactive Data Means For The Future Of Federal |access-date=March 3, 2014 |url-status=dead |archive-url=https://web.archive.org/web/20110927183505/http://www.cwsl.edu/content/journals/Brunka.pdf |archive-date=September 27, 2011  }}</ref> Some of these cases were noteworthy for their size: in December 2007 the agency won $468&nbsp;million in a settlement for [[Options backdating|stock option backdating]] against the former chairman and CEO of [[UnitedHealth Group]].<ref>{{cite web|url=https://www.sec.gov/news/press/2007/2007-255.htm |title=Former UnitedHealth Group CEO/Chairman Settles Stock Options Backdating Case for $468 Million |publisher=Sec.gov |date=December 6, 2007 |access-date=March 3, 2014}}</ref>

Cox also aggressively used the agency's “Fair Funds” authority to distribute funds recovered from securities law violators directly to injured investors.<ref>{{Cite web |date=February 5, 2008 |title=Press Release: SEC Chairman Cox Announces Creation of New Office, Appointment of Leaders, to Expedite Distribution of Billions to Injured Investors |url=https://www.sec.gov/news/press/2008/2008-12.htm |access-date=November 7, 2023 |website=www.sec.gov}}</ref> By February 2008 the [[U.S. Securities and Exchange Commission|SEC]] had returned more than $3.5&nbsp;billion to wronged investors, including more than $2&nbsp;billion in 2007 alone.<ref>{{Cite news |date=February 5, 2008 |title=SEC forms office to pay back wronged investors |language=en |work=Reuters |url=https://www.reuters.com/article/us-sec-penalties-idUSN0543785220080205 |access-date=November 7, 2023}}</ref> To expedite the return of the funds, cut red tape and lower costs, Cox created a new Office of Collections and Distributions.<ref>[https://www.cnbc.com/2007/05/17/sec-to-focus-on-returning-funds-to-victims-of-stock-fraud.html "SEC to Focus on Returning Funds to Victims of Stock Fraud", Associated Press] May 17, 2007</ref> A few weeks later, in May 2008, the new Office began sending more than $800&nbsp;million in Fair Funds to harmed investors in [[AIG|American International Group, Inc. (AIG)]], which settled [[U.S. Securities and Exchange Commission|SEC]] charges of [[securities fraud|financial fraud]].<ref>[https://www.sec.gov/news/digest/2008/dig050508.htm "SEC Announces Start of Distribution Process in AIG Settlement; Court Approves Distribution Plan for $800&nbsp;Million Fair Fund", SEC News Digest] May 5, 2008</ref> In 2006 the [[U.S. Securities and Exchange Commission|Commission]] obtained a $350&nbsp;million penalty from [[Fannie Mae]] after accusing it of [[Accounting scandals|accounting fraud]]; the penalty was one of the largest in [[U.S. Securities and Exchange Commission|Commission]] history.<ref>[http://www.ucdailynews.com/news/consumer/10691261.html "SEC Distributes $356&nbsp;Million To Defrauded Fannie Mae Investors", ''UC Daily News''] {{webarchive |url=https://web.archive.org/web/20110717131935/http://www.ucdailynews.com/news/consumer/10691261.html |date=July 17, 2011 }} October 20, 2007</ref> The following year the [[U.S. Securities and Exchange Commission|Commission]] charged [[Freddie Mac]] with [[Accounting scandals|accounting fraud]] and recovered a $50&nbsp;million penalty.<ref>{{cite web|url=https://www.sec.gov/news/press/2007/2007-205.htm |title=Freddie Mac, Four Former Executives Settle SEC Action Relating to Multi-Billion Dollar Accounting Fraud |publisher=Sec.gov |date=September 27, 2007 |access-date=March 3, 2014}}</ref>

As the 2008 [[credit crunch]] spread to [[Municipal bond|municipal finance]], the [[Auction rate security|auction rate securities]] market froze, leaving investors without access to their cash.<ref>[http://www.cfo.com/article.cfm/11286699/c_11286965?f=home_todayinfinance "Liquidating Frozen Auction-Rates", CFO.com] {{Webarchive|url=https://web.archive.org/web/20090323152105/http://www.cfo.com/article.cfm/11286699/c_11286965?f=home_todayinfinance |date=March 23, 2009 }} April 29, 2008</ref> The [[U.S. Securities and Exchange Commission|SEC]] immediately investigated the largest firms in the market and entered into settlements that were the largest in the history of the [[U.S. Securities and Exchange Commission|SEC]], amounting to up to $30&nbsp;billion to injured
investors.<ref>[http://www.securitiesdocket.com/2008/12/11/sec-finalizes-30-billion-ars-settlements-largest-in-sec-history/ "SEC Finalizes $30&nbsp;Billion ARS Settlements, Largest in SEC History", ''Securities Docket''] December 11, 2008</ref>

Cox also targeted [[Municipal bond|municipal securities]] [[securities fraud|fraud]]. In April 2008 the [[U.S. Securities and Exchange Commission|SEC]] charged five former [[San Diego]] city officials with [[securities fraud]] involving billions in undisclosed pension liabilities that had placed the city and taxpayers in serious financial jeopardy.<ref>{{Cite web |date=April 7, 2008 |title=SEC Charges Five Former San Diego Officials with Securities Fraud |url=https://www.sec.gov/news/press/2008/2008-57.htm |access-date=November 7, 2023 |website=www.sec.gov}}</ref> Throughout his chairmanship he railed against the inadequacy of disclosure to investors in municipal securities, which the [[U.S. Securities and Exchange Commission|SEC]] does not regulate,<ref>[https://www.sec.gov/news/speech/2007/spch071807cc.htm Speech by SEC Chairman: "Integrity in the Municipal Market"] July 18, 2007</ref> and asked [[U.S. Congress|Congress]] for explicit authority for the agency to do so.<ref>[http://www.cfo.com/article.cfm/11046958/c_11049635?f=home_todayinfinance "SEC Inches Toward More Authority Over Munis; Will Chairman Cox, Before His Term Ends This Year, Get His Wish to Make Municipalities Follow Financial-Reporting Rules Similar to Those Governing Corporations?", CFO.com] {{Webarchive|url=https://web.archive.org/web/20090323151343/http://www.cfo.com/article.cfm/11046958/c_11049635?f=home_todayinfinance |date=March 23, 2009 }} April 16, 2008</ref> In December 2008, the [[U.S. Securities and Exchange Commission|SEC]] under his leadership authorized the creation of a free, Internet-accessible repository for municipal finance disclosure.<ref>{{cite web |last=Waddell |first=Melanie |url=http://www.investmentadvisor.com/news/2008/12/Pages/SEC-Provides-More-Transparency-on-Municipal-Securities-.aspx |title=SEC Provides More Transparency on Municipal Securities; MSRB's online portal will provide instant data |publisher=Investmentadvisor.com |access-date=March 3, 2014 |archive-url=https://web.archive.org/web/20090102062030/http://www.investmentadvisor.com/news/2008/12/Pages/SEC-Provides-More-Transparency-on-Municipal-Securities-.aspx |archive-date=January 2, 2009 |url-status=dead }}</ref> "With liquidity problems of municipal auction rate securities and rating downgrades of municipal bond insurers contributing to the current credit crisis, the disclosure and transparency of the municipal markets have never been more critical," he said.<ref>{{cite web|url=https://www.sec.gov/news/press/2008/2008-286.htm |title=SEC, MSRB: New Measures to Provide More Transparency Than Ever Before for Municipal Bond Investors |publisher=Sec.gov |access-date=March 3, 2014}}</ref>

In late December 2008, following the confession by New York [[investment advisor]] [[Bernard Madoff]] and the filing of [[Securities and Exchange Commission|SEC]] charges against him alleging a $50 billion fraud, Cox stated that he was "gravely concerned" that "specific and credible evidence" provided to the agency over a period of at least 10 years had not previously been referred to the [[Securities and Exchange Commission|Commission]] for commencement of a formal investigation. He ordered an internal investigation by the agency's Inspector General.<ref>[https://www.sec.gov/news/press/2008/2008-297.htm Statement Regarding Madoff Investigation] December 16, 2008</ref> The report found that substantive allegations concerning Madoff were first brought to the [[Securities and Exchange Commission|SEC]] in 1992.<ref>{{cite web|url=https://www.sec.gov/news/studies/2009/oig-509.pdf|title=U.S. Securities and Exchange Commission, Office of Investigations: Investigation of Failure of the SEC to Uncover Bernard Madoff's Ponzi Scheme (Report No. OIG-509, August 31, 2009), at 21 ff.|access-date=June 18, 2017}}</ref>

==== Response to the beginning of the 2008 U.S. recession ====
{{further|Late 2000s recession}}
[[File:President Bush Discusses Economy 2008-9-19.jpg|thumb|right|Cox, [[Hank Paulson]], and [[Ben Bernanke]] watch as President [[George W. Bush]] delivers a statement on the economy in 2008]]
Under his leadership, the [[U.S. Securities and Exchange Commission|SEC]] on September 17 and 18, 2008, imposed a variety of both permanent and emergency restrictions on [[Short (finance)|short selling]] in response to the liquidity crisis.<ref name="ReferenceA">{{cite web|url=https://www.sec.gov/news/press/2008/2008-235.htm |title=Press Release: Statement of Securities and Exchange Commission Concerning Short Selling; 2008-235; Oct. 1, 2008 |publisher=Sec.gov |access-date=August 13, 2012}}</ref> Abusive [[naked short selling]], in which the seller intentionally fails to deliver the shares sold short in time for settlement, was banned outright, an exception for options [[market maker]]s that had been in place for several years was eliminated,<ref>{{cite web|url=https://www.sec.gov/rules/final/2008/34-58775.pdf |title=SEC website re "naked short selling" |access-date=March 3, 2014}}</ref> and a new anti-fraud provision, Rule 10b-21, was adopted to give specific enforcement authority in such cases.<ref>{{cite web|url=https://www.sec.gov/rules/final/2008/34-58774.pdf |title=Final Rule: "Naked" Short Selling Antifraud Rule |access-date=March 3, 2014}}</ref> In September 2008, [[Short (finance)|short selling]] of 799 financial stocks was temporarily curtailed<ref name="ReferenceA"/> in response to rumors accompanied by heightened short selling activity in the shares of major financial institutions.

On September 26, 2008, Cox ended the 2004 program for voluntary regulation of investment bank holding companies, begun under [[William H. Donaldson|SEC Chairman William Donaldson]] and then-Director of Market Regulation (later [[Securities and Exchange Commission|SEC]] Commissioner) [[Annette Nazareth]]. The program "was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily," Cox said.<ref name="ReferenceB">{{cite web|url=https://www.sec.gov/news/press/2008/2008-230.htm |title=Press Release: Chairman Cox Announces End of Consolidated Supervised Entities Program; 2008-230; Sept. 26, 2008 |publisher=Sec.gov |date=September 26, 2008 |access-date=August 13, 2012}}</ref> A critical report by the [[Securities and Exchange Commission|SEC]] inspector general that evaluated the program in light of the [[Bear Stearns]] near-failure in March 2008 found that while "[[Bear Stearns]] was compliant with the capital and liquidity requirements" at the time of its acquisition, "its collapse raises serious questions about the adequacy of these requirements." However, according to the Inspector General, his report "did not include a determination of the cause of [[Bear Stearns]]' collapse" or determine "whether any of these issues directly contributed to [[Bear Stearns]]' collapse." On that subject, the report stated, "we have no evidence linking these significant deficiencies with the cause of [[Bear Stearns]]' collapse."<ref>{{cite web|url=https://www.sec.gov/about/oig/audit/2008/446-a.pdf |title=CPY Document Title |access-date=March 3, 2014}}</ref><ref>[https://www.washingtonpost.com/wp-dyn/content/article/2008/09/26/AR2008092603489.html?hpid=topnews ''The Washington Post''], September 26, 2008</ref> Cox criticized the oversight program on the ground that because of its voluntary nature and the [[Securities and Exchange Commission|SEC's]] limited statutory authority, the agency could not force changes in the hundreds of unregulated subsidiaries of large investment banks such as [[Goldman Sachs]], [[Morgan Stanley]], [[Merrill Lynch]], [[Lehman Brothers]] and [[Bear Stearns]] as bank regulators could do with bank holding companies. In testimony before Congress on several occasions in 2008, he asked for statutory authority to regulate investment bank holding companies.<ref>{{cite web|url=https://www.sec.gov/news/testimony/2008/ts092308cc.htm|title=Testimony Concerning Turmoil in U.S. Credit Markets: Recent Actions Regarding Government Sponsored Entities, Investment Banks and Other Financial Institutions (Christopher Cox, September 23, 2008)|website=sec.gov|access-date=June 18, 2017}}</ref>

In addition to the fact that the [[Gramm-Leach-Bliley Act]] did not give the [[Securities and Exchange Commission|SEC]] the authority to regulate large investment bank holding companies, Cox noted that investors were vulnerable to other regulatory gaps such as the fact that the $60&nbsp;trillion market for [[credit default swap]]s was then completely unregulated. "Neither the SEC nor any regulator has authority even to require minimum disclosure", he said.<ref name="ReferenceB"/> In testimony and public statements he urged [[United States Congress|Congress]] to enact remedial legislation.<ref>{{cite web|url=https://www.sec.gov/news/speech/2008/spch101808cc.htm|title=SEC Statement: Swapping Secrecy for Transparency (staff)|website=sec.gov|access-date=June 18, 2017}}</ref>

Cox said that during the buildup of the [[2008 financial crisis]], when the [[credit rating agency|credit rating agencies]] were still unregulated, they gave top credit ratings to financial instruments which packaged risky loans and spread the negative impacts of the [[2008 financial crisis]] more broadly throughout the markets.<ref>{{cite web|url=https://www.sec.gov/news/speech/2008/spch120308cc.htm |title=Statement at Open Meeting on Credit Rating Agency Reforms |publisher=Sec.gov |access-date=March 3, 2014}}</ref> Following the first-time SEC registration of the [[credit rating agency|credit rating agencies]] in September 2007 under newly enacted legislative authority, he ordered a 10-month examination of the three major [[credit rating agency|rating agencies]] that uncovered significant weaknesses in their ratings practices for [[mortgage-backed security|mortgage-backed securities]] and that called into question the impartiality of their ratings. The results were reported to [[United States Congress|Congress]] in July 2008.<ref>{{cite web|url=https://www.sec.gov/news/studies/2008/craexamination070808.pdf |title=Summary Report of Issues Identified in the Commission Staff's Examinations of Select Credit Rating Agencies |access-date=March 3, 2014}}</ref> The [[Securities and Exchange Commission|SEC]] immediately commenced a rulemaking which concluded on December 3, 2008, with approval of a series of measures to regulate the conflicts of interests, disclosures, internal policies, and business practices of [[credit rating agency|credit rating agencies]]. The regulations were intended to ensure that firms provide more meaningful ratings and greater disclosure to investors concerning [[collateralized debt obligation]]s and [[Residential mortgage-backed security|residential mortgage-backed securities]].<ref>{{cite web|url=https://www.sec.gov/news/speech/2008/spch120308ers.htm |title=SEC Open Meeting: Final Rules and Proposed Rules Implementing the Credit Rating Agency Reform Act |publisher=Sec.gov |access-date=March 3, 2014}}</ref>

In an interview with ''[[The Washington Post]]'' in late December 2008, Cox said, "What we have done in this current turmoil is stay calm, which has been our greatest contribution—not being impulsive, not changing the rules willy-nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants." Cox added that the [[U.S. Securities and Exchange Commission|Commission's]] decision to impose a three-week ban on short selling of financial company stocks was taken reluctantly, but that the view at the time, including from Treasury Secretary [[Henry M. Paulson]] and [[Federal Reserve]] chairman [[Ben Bernanke]], was that "if we did not act and act at that instant, these financial institutions could fail as a result and there would be nothing left to save."<ref>[https://www.washingtonpost.com/wp-dyn/content/article/2008/12/23/AR2008122302765.html?sid=ST2008122302866&s_pos= ''The Washington Post'' article on Cox] December 23, 2008</ref> In a December 2008 interview with [https://www.reuters.com/article/ousivMolt/idUSTRE4BU3FL20081231 Reuters], he explained that the [[U.S. Securities and Exchange Commission|SEC's]] Office of Economic Analysis was still evaluating data from the temporary ban, and that preliminary findings pointed to several unintended market consequences and side effects. "While the actual effects of this temporary action will not be fully understood for many more months, if not years ... knowing what we know now, I believe on balance the [[U.S. Securities and Exchange Commission|Commission]] would not do it again."<ref>Reuters interview, December 2008</ref>

Cox stepped down as Chairman of the SEC at the end of the Bush administration, on January 20, 2009.