“Chairman Cox has increased to 34 percent of the S.E.C. work force from 32 percent in 2005 and 29 percent in the 1990s. This investment in investor protection already is paying significant dividends.”

The baldfaced lie above was issued under SEC Chairman Cox about how he had improved the agency enforecement staff to protect investors.

Only not so much.

As Floyd Norris noted, this was a very misleading statistical sleight of hand: “The commission’s enforcement staff had declined in size under his chairmanship. It had just declined at a slower rate than the rest of the staff. When I asked if the enforcement staff would look askance at a company that made a similarly disingenuous claim in an S.E.C. filing, his staff seemed surprised.

Cox, like his two predeccessors, were wholly unsuitable to be running the SEC.

From Bailout Nation:

Then there is Christopher Cox, a stumblebum of an SEC Chair. Cox was more hapless than anything, unable to successfully navigate the fierce lobbying thrown up by Wall Street.

In July 2007, Cox eliminated the so-called uptick rule, removing a key restraint on shorting just as the credit crunch was getting started. (Not very smart). The market peaked shortly afterwards, and began heading south — with no uptick rule to prevent indiscriminate short selling. Then in September 2008, with the crisis in full flower, the clueless dolt made shorting financial stocks illegal. Apparently, he was unaware that fierce market selloffs are often slowed by short sellers covering their positions (to lock in profits on their bearish bets). Without any short-sellers in the market, the downturn became even worse. From the market highs of October 2007, the S&P 500 and the Dow Jones Industrial Average were cut in half in 12 months. Much of the damage came after the no-shorting rule went into effect. (As GOP Presidential candidate in 2008, Sen. Johh McCain called for Cox’s resignation.)

All I can say is good riddance!


Previously:S.E.C. Chairmen, 2001-08 (December 2008)


Christopher Cox Leaves
Floyd Norris
NYT, January 21, 2009, 4:53 PM


Category: Bailouts, Investing, Legal, Markets, Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

26 Responses to “Good-Bye and Good Riddance to Chris Cox”

  1. ben22 says:

    Indeed, good riddance to Cox!!

    Another case of someone at the top getting paid to suck.


    A little OT but

    1. What do you make of the BAC share purchase and JPM purchase by Lewis/Dimon yesterday?
    [BR: I have a post on it launching at 9]
    2. Did you see my mention of the ultra bashing that is going on @thestreet.com by anonymous author
    3. Tell me you saw that moron “leader” armey on CNBC this morning, spewing garbage
    4. What is your take on earnings so far, to me things don’t seem too terrible, I haven’t started to add things up but there have been some good beats, but I also realize some really ugly misses GOOG to come.

    I guess that’s enough, love the site.

  2. flipspiceland says:

    One hopes that he placed his own investment bets on the stocks of the institutions that are now defunct and that he did not profit from his moves. Yeah, right.

  3. dead hobo says:

    Unfortunately, people who are clueless about everyday things are also clueless about their past. Cox might have a dull awareness of his failures, but I’m sure he is in denial about most and proud of a lot of his activities.

    The only people who care about their mistakes are people who try to do quality work. That concept doesn’t apply here.

    Also, “dolt”??? You’re ruder than my obnoxious cousin. And he is a certifiable son of a bitch, and proud of it.

  4. globaleyes says:

    …and the world is a better place.

  5. ben22 says:

    Alright I know this is off topic but I’m getting so angry right now watching CNBC. These guys are spewing about cutting taxes as a fix to the economy.

    I can tell you right now, as a business owner, that if my taxes get cut, I’m not going to hire any new employee’s, just isn’t going to happen.

    Do they have any idea how much the average person has in debt on the personal Balance sheet.

    Sorry BR, I know this doesn’t have to do with cox but it’s driving me nuts.

  6. awilensky says:

    He needs a calm, organized, sober, beating. Not a angry beating, but a good for country and fellowman beating. It’s patriotic to give a man a sobering slap.

  7. Ethel-to-Tilly says:

    I would have added something about the general shoddy quality of his appointments to the list of Bush’s economic mistakes. So many people appointed on the basis of ideology or cronyism rather than competence. Heckuva job Coxie!

  8. Mike in Nola says:

    ben22 – they are a one trick pony. Maybe necessity will teach them another.

    Cox’s problem was not being aggressive enough hunting down the shorts.


  9. wally says:

    I’m getting vibes here that somehow you don’t think that guy did a great job.

  10. ottovbvs says:

    In Cox what you saw was what you got. He was Republican doctrinaire who believed in minimising regulation and the infallibility of markets. That’s why he got the job for godsake. It’s why all those energy and mining lobbyists and executives ended up with jobs at interior, energy, defense, HHS, FDA. It’s why inept and crude idealogues like Shlozeman were put in DOJ so they could make sure all the lawyers they hired were members of the Federalist Society. It’s why you had a 29 year old lawyers censoring scientific reports at NASA. In layman’s parlance it’s called putting the fox in charge the henhouse. He runs it for the benefit of the foxes not the chickens. Now f%$#@ing up the government is ok with some who think it’s ok for bankers to rip us off or defense contractors to poison the groundwater because it’s supposed to accord with their notion of conservative principles. It may accord with such principles but it doesn’t serve the public good.

  11. Stuart says:

    With such considerable damage to investors confidence via so much corruption in the markets as a result of direct or indirect actions by himself , it’s not enough for him to just fade into the sunset scott free, he needs to be brought back and held to account. If not done here, then send him to Juarez and let some of the locals there bring him to justice.

  12. Moss says:

    CNBC had a moderate Republican on a few days ago discussing how the Reagan Orthodoxy was a historic relic. I can not find it on their site (surprise). It would be a great remedial activity for Armey and the others to review. I sensed evidence that some on CNBC, Karl Q in particular, are growing weary of the BS Armey is sticking to.

  13. Mannwich says:

    Heckuva job, Coxie!

    It’s getting to the point where anyone who wears a suit and tie every day is not to be trusted.

  14. mudpuppy says:

    How dare you criticise Chairman Cox. You are an anti- capitalist, anti-free market liberal wack. You probably don’t like Ann Coulter either. I’m outta here.

  15. mark mchugh says:

    I know this theory is half baked, but I’m gonna throw it out there anyway.

    The removal of the uptick rule has been a point of fascination for me. I’m thinking that what it did in essence was allow the vaporization of wealth. The uptick rule was essential in maintaining an orderly market, so when selling pressure by longs was high, shorts couldn’t fan the flames. Now, when there is a run on a stock, it is part wealth transfer part wealth vaporization.

    What I’m trying to get at is, say for example AAPL’s market cap went from $200B down to $80B , so in a perfect, orderly market (with no spreads) that would represent a net transfer of $120B- for redemptions and short profits, right? Well, I get the feeling that the chaos created by removing the uptick rule allows prices to drop so quickly that a very large percentage of the $120B could just get “vaporized”.

    If you can vaporize dollars in one area, can’t you just print new money without really increasing money supply? And despite all the clamoring, the uptick rule has not been re-instated. Maybe this is why. We can fund bailouts by stealing wealth from shareholders.

    Sorry I can’t do a better job explaining this, but I think this may be why Cox received as much support as he did.

  16. mitchn says:

    Also OT, but: Will someone please tell me why the genisues at CNBC keep dragging decrepit old Hank Greenberg out to talk his (rapidly shrinking) book?

  17. Thisson says:


    Your theory doesn’t make much sense to me. In each transaction, there is a winning and losing side of the trade. Wealth doesn’t disappear, it just changes hands. The way wealth would be vaporized would be through inflation (increase in money supply).

    What I’m trying to understand is whether we can simultaneously have deflation (falling prices) and inflation (increase in money supply). I suspect that we can.

  18. mark mchugh says:

    I don’t see how you can maintain an orderly market when you’ve got a thousand sellers and a thousand shorts (without a buyer in sight), and you have to make prices for everyone. It becomes a fire sale at the expense of the remaining shareholders (the losers).

  19. dwkunkel says:

    I’m all for reinstating the up tick rule for shorts as long as we institute a down tick rule for longs.

  20. gnomic says:

    I’d salt the earth behind him… but I can’t afford the salt!

  21. Moss says:

    @mark mchugh:

    I believe you are correct to some extent since the uptick rule would not have allowed the offer prices
    to be lower and lower and than have the market sell orders always get a hit.

    It most definitely has added to the incredible volatility.

  22. Maybe he can go off and hang out with his cousin Chubby

    (starting at 6:44 , but the whole thing is classic…)

  23. eleanorpagedarby says:

    Aside from the slight-of-hand with the numbers in Cox’s statement, since when is increasing staff an indicator of success? It was in communist enterprises, but successful organizations typically focus on measures of results.

  24. Speaking of the book, any update on if/when autographed copies will be available? I’m pretty pleased that I was able to preorder a signed copy of Michael Yon’s..

  25. napster says:

    Cox isn’t incompetent.

    He did it on purpose. He wanted to wreck the economy and the financial system. That’s what his masters want. He will now be taken care of with sinecures by the royalty.

    Because if government fails and goes bankrupt, the power defaults to the financial elite.

    Okay, maybe I’m just be careless with my sarcasm, but I wouldn’t flinch if the the utter stupidity of the last 8 years was actually really intelligence applied for all the wrong reasons. After all, despotism is best that becomes carried forth by smart individuals, picked and hired by the aristocracy.

  26. algernon says:

    “Apparently, he was unaware that fierce market selloffs are often slowed by short sellers covering their positions (to lock in profits on their bearish bets)”

    Barry, of them all, I find this the most effectively damning criticism of Cox. Republicans have done so much to falsely blacken the image of capitalism