Cox's nomination to run SEC signals a regulatory shift

Business-Friendly Californian Fought Class-Action Suits, Stiffer Accounting Rules; Democrats Reserve Judgment

In naming Rep. Christopher Cox as the new chairman of the Securities and Exchange Commission, President Bush is picking a business-friendly champion of free enterprise who worked in the Reagan White House. The California Republican has supported legislation making it harder for investors to file securities-fraud suits and opposed stricter rules on expensing stock options and merger accounting.

His arrival promises to bring a shift in the SEC's approach to its crucial role in regulating businesses and markets. It comes in the wake of an unprecedented crackdown on corporate fraud over the past 21⁄2 years. The scandals at Enron Corp., WorldCom Inc. and other companies prompted stiffer penalties, stricter accounting rules and a wave of enforcement actions by state and federal regulators.

Now the regulatory terrain could be changing. "He's someone who, if he is confirmed, portends a major shift in the direction of the SEC," said Joel Seligman, dean of Washington University law school and an SEC historian.

Mr. Cox's appointment is a victory for the business lobby, led by institutions like the U.S. Chamber of Commerce, which has been arguing that it needs relief from what it considers to be heavy-handed securities regulation. In the past year that message has been getting attention. Congress has passed legislation making it harder for consumers to file for bankruptcy-court protection and putting restrictions on class-action lawsuits.

•	Cox's nomination to run SEC signals a regulatory shift New Direction Wall Street Journal, Friday, June 3, 2005 Byline: Deborah Solomon, Michael Schroeder, David Rogers and Diya Gullapalli, WSJ staff

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