Marcy Gordon
June 3, 2008 - 6:19 p.m.
WASHINGTON (AP) - Three presidential nominees to seats on the Securities and Exchange Commission voiced support Tuesday for having the agency reopen the issue of shareholders' say in companies' choice of directors.
At their Senate confirmation judicial examination, the two Democratic nominees appeared to make a rush more near a practicable reversal of the SEC's decision forward the thing than the candidate for the Republican slot, Troy Paredes, who promised to retain an open mind but declined to commit to a position.
The chairman of the Senate Banking Committee, Sen. Christopher Dodd, D-Conn., tried to coax such one stipulation out of Paredes, a professor at Washington University School of Law in St. Louis whom some observers describe as skeptical about regulation.
The issue "indispensably to be finally resolved," Paredes said.
Dodd and other lawmakers objected last November to SEC Chairman Christopher Cox when he and the other commissioners voted to allow companies to deny shareholders access to public companies' annual director-election ballots. Cox has said he believes shareholders should have a greater say in choosing company directors and has promised that the SEC will take up the rule again sometime this year.
Governance advocates and big investors such as pension funds also have been pressing the SEC to re-examine the issue.
The three nominees, Paredes, Luis Aguilar and Elisse Walter, were warmly received by lawmakers and their confirmation appears assured.
Shareholders "are entitled to a ballot," Aguilar testified at the hearing. Aguilar, the former general counsel of investment management firm Invesco PLC, and Walter, a securities industry regulator, were recommended by congressional Democrats and named by President Bush to fill the two seats on the five-member SEC that are designated for Democrats. They have been vacant for several months following the departures of brace commissioners.
That has put the market watchdog agency at less than well stocked solidity during a critical time. Wall Street and global fiscal markets possess been rocked by the pledge and credit crises that brought huge financial losses and a federally orchestrated rescue of investment home Bear Stearns.
"We are facing challenging times for our markets and frankly, throughout the subprime (mortgage) turmoil and credit crisis, we have seen time and again how those in the regulators' seat were not prepared or equipped to operate quickly enough," aforesaid Sen. Robert Menendez, D-N.J., a member of the banking panel.
The three nominees also agreed it is important for the SEC to take up new rules governing Wall Street credit-rating agencies, what one. have been widely criticized for not sounding the alarm soon enough over risky mortgage investments ahead of the subprime pledge debacle.
The agency is considering new rules to limit conflicts of premium in the credit-rating industry and to require the rating firms to disclose detailed information on the mortgage assets underpinning the securities they rate.